1951-05-03

QUESTIONS

[Stage Direction]
(Questions answered orally are indicated by an asterisk.)

Mr. Pearkes:: 1.	Has the government sold or leased all, or any portion of the dominion arsenal at Longueuil; Quebec?
2.	Is the government negotiating any such sale or lease?
3.	If so, to whom, and under what terms?
4.	Has1 any action been taken to dispose of any other arsenals in Canada?
5.	If so, what action?
6.	What disposition will be made, if any, of the personnel affected?


Mr. Mcllraiih:: 1.	No.
2.	A lease is being negotiated.
3.	Sorel Industries Limited, Sorel, Quebec, to form part of the over-all operations required in the production of guns and gun equipment. The use of the Longueuil plant will form part of the over-all operations
required. The terms of the lease have not yet been fully determined.
4.	No action has been taken to dispose of any other arsenals in Canada. However, the arsenal at Valleyfield, Quebec, is under a management contract to Defence Industries Limited, a. subsidiary of Canadian Industries Limited. This. contract was arranged by Canadian Arsenals Limited. A small government-owned chemical plant at Canadian Industries Limited, Shawinigan, Quebec, is also, being reactivated under the management of Defence Industries Limited.
5.	Answered by No. 4.
6.	Personnel will not be affected, as the present staff is expected to remain and additional personnel will be needed.


ALCOHOLIC BEVERAGES
Mr. Diefenbaker:: 1.	What have been the federal government's revenues from imported and domestic alcoholic beverages in (a) 1950; (b) 1945; (c) 1939?
2.	What was the distribution of these beverages, by provinces, in the same years?


Mr. Mcllraiih:: 1. Excise revenues, import duties and revenue from licences and fees on alcoholic beverages.
Fiscal	Excise	Licences	Import	Year	Revenues	and Fees	Duties	Total$	$	$	$Spirits 	. 1950	52,702,888	797,837	27,249,087	80,749,8121945	31,576,776	639,898	12,390,526	44,607,2001939	9,929,585	396,013	6,259,622	16,585,220Malt and malt products	. 1950	59,696,608	3,550	54,388	59,754,5461945	42,468,192	4,750	34,312	42,507,2541939	8,545,245	4,800	20,994	8,571,039Wine 	1950	2 125 fiOfi	5ft7 4R1	9 719 n^71945	1,772^375	239,737	2,012,1121939	230,209	293,311	523,520Total 	. 1950	114,525,102	801,387	27,890,926	143,217,4151945	75,817,343	644,648	12,664,575	89,126,5661939	18,705,039	400,813	6,573,927	25,679,779
Note.-There are certain additional revenues for which details cannot be shown. Sales tax revenue is not available for separate commodities. As regards income tax, no analysis is made of actual income tax collections as detailed information about the taxpayer is not given at the time payment is made. Income tax returns filed by corporations engaged in the production of alcoholic
beverages showed a declared tax liability for the taxation years 1945 and 1949 (latest available) as follows: Taxation year 1945: income tax, $9,644,000; excess profits tax, $27,095,000.
Taxation year 1949: income tax, $19,082,000; excess profits tax, nil.
Similar information for taxation year 1939 is not available.

Questions
2. Sales of Alcoholic Beverages, Reported by Liquor Control Boards	Fiscal Years Ended in 1950, 1945 or Commissions. 1950 1945 $ $	and 1939 as 1939 $Newfoundland	. 4,452,156	Not available	Not availablePrince Edward Island	. 2,146,972	713,073	Not availableNova Scotia	. 21,155,428	19,133,013	5,483,433New Brunswick	. 13,798,012	10,920,973	3,714,749Quebec	. 118,113,801	75,745,867	34,296,963Ontario	. 196,790,174	102,885,847	49,637,986Manitoba	. 27,090,239	15,298,548	5,947,637Saskatchewan	. 29,297,885	13,623,679	6,012,144Alberta	. 39,850,663	20,564,057	8,645,554British Columbia	. 57,285,610	29,358,380	13,738,097Yukon 	. 1,454,289	623,933	231,457Northwest Territories	. 676,600	217,266	-Total	. 512,111,829	289,084,636	127,708,020


CIVIL SERVICE-APPOINTMENTS AND RELEASES
Mr. Fulton:: 1.	How many employees of all classifications, including permanent and temporary civil servants and all other appointments outside the civil service, including also crown companies but excluding service personnel in the defence department have been taken on in the government service from the 1st of May, 1945, to date?
2.	What is the total number of releases for all categories covered by question No. 1 during the same period?


Mr. Bradley:: I understand the hon. member proposes to amend this question; therefore I suggest that in its present form it should be dropped.


Mr. Fulton:: I suggest that it be allowed to stand, and I will try to reword it.


Mr. Speaker:: Stand.



QUESTIONS PASSED AS ORDERS FOR RETURNS


Mr. Stewart (Winnipeg North):: What fees, travelling and other expenses were paid to all individuals who represented the government in connection with the Japanese property claims commission?


DEPARTMENT OP CITIZENSHIP AND IMMIGRATION -PROFESSIONAL AND SPECIAL SERVICES
Mr. Fulton:: 1.	What was the total paid by the Department of Citizenship and Immigration for professional and special services in the fiscal year 1959-51?
2.	What person, persons, firms or companies received payments of over $25,000 under this heading in the said year, what was the actual amount of each payment, and for what service was the payment made in each case?


DEPARTMENT OF JUSTICE-PROFESSIONAL AND SPECIAL SERVICES
Mr. Fulton:: 1.	What was the total paid by the Department of Justice for professional and special services in the fiscal year 1950-51?
2.	What person, persons, firms or companies received payments of over $5,000 under this heading in the said year, what was the actual amount of each payment, and1 for what service was the payment made in each case?


LABOUR CONDITIONS
[Stage Direction]
On the orders of the day:
Mr. G. F. Higgins (St. John's East):: Is the
Minister of Labour aware of labour troubles involving Newfoundland workmen engaged in the construction of the railway line from Seven Islands, Quebec, to the iron ore deposits?


Hon. Milton F. Gregg (Minister of Labour):: The hon. member was kind enough to let me have advance notice of this question. I must tell him I am not aware of any circumstances which would have brought dissatisfaction to the Newfoundland workers engaged on the railway line from Seven Islands to the iron ore deposits.
Our national employment service has no local office at Seven Islands as yet. For several months consideration has been given to the opening of an office there. The required authority from the civil service commission has been secured. The Department of Public Works has been requested to provide the necessary accommodations for the staff. The project is being delayed, however, owing to the fact that there is no particular

site at Seven Islands which could be rented or purchased for the local office. The possibility of moving in a prefabricated general purpose hut is now being explored.
When our employment service operates at Seven Islands it will be its policy to provide equitable distribution of jobs as between workers from Quebec and workers from the Atlantic region.


EDUCATION
[Stage Direction]
On the orders of the day:
Mr. R. R. Knight (Saskatoon):: I should like to address a question to the Prime Minister. In view of the statement in Saturday Night and elsewhere that all Canadian universities are fully agreed that if federal aid is not forthcoming they cannot maintain the present high level of education, can we expect legislation at this session which would have as its object the provision of such aid?


Right Hon. L. S. St. Laurent (Prime Minister):: I am sorry that at this time I cannot give a short, positive answer to the hon. member. As hon. members are aware, the royal commission on national development in the arts, letters and sciences probably will be dealing with the subject of the needs of the universities and their relationship with the federal government. The government naturally will want to consider the recommendations of the royal commission before reaching any decision on this matter. I might add that in a speech at the university of Toronto on October 27 of last year I referred to this matter in the following words:
I think many of us recognize increasingly that some means must be found' to ensure to our universities the financial capacity to perform the many services which are required in the interest of the whole nation.
I then turned to Mr. Massey, who is the chancellor of the university, and expressed the hope that his commission would "be able to help us to find a proper solution of that difficult problem." I am advised that the commission is doing everything it can to expedite the presentation of its report.


Mr. Macdonnell (Greenwood):: May I
venture to say to the Prime Minister that, whether he intended it or not by that speech, he aroused high hopes on the part of the Canadian universities.


Louis Stephen St-Laurent: I think that all Canadians would like to see hopes raised as to the possibility of the Canadian universities continuing to fulfil in this country the role that is of such great national importance.
Inquiries of the Ministry


Mr. Blackmore:: May I direct a supplementary question to the Prime Minister, based on the question of state aid to universities? May I ask the Prime Minister if, in his opinion, it is physically possible for Canada to provide the universities with the needs or requirements which would enable them to carry on?


Louis Stephen St-Laurent: Mr. Speaker, I do not
think that question requires any answer.


John Horne Blackmore: May I ask another supplementary question? If it is physically possible for Canada to supply the needs of the universities, is there any conceivable reason why it should not be made financially possible?


Louis Stephen St-Laurent: I am surprised to hear
that kind of question from an adherent of social credit policies.


John Horne Blackmore: I have one more question.


Mr. Speaker:: May I ask the hon. member to reserve his question for another occasion?


QUESTION AS TO INITIAL PRICES FOR WESTERN WHEAT, OATS AND BARLEY FOR 1951 CROP YEAR
[Stage Direction]
On the orders of the day:
Mr. H. R. Argue (Assiniboia):: I should
like to direct a question to the Minister of Trade and Commerce. My question arises out of the fact that spring seeding operations are about to start on the prairies and that there is need for the farmers to know in advance the initial prices, in order that they may be able to decide what acreage to seed. My question is this: Can the minister state when an announcement will be made of the initial prices of wheat, oats and barley for the 1951 crop year?


Right Hon. C. D. Howe (Minister of Trade and Commerce):: Consideration is being given to the initial prices for wheat, oats and barley, and I am hopeful that an announcement can be made within the next twe weeks.


RESEARCH ENTERPRISES
[Stage Direction]
On the orders of the day:
Mr. J. W. Noseworthy (York South):: I
should like to direct a question to the Minister of Defence Production. Is the government giving consideration to the re-establishment of the plant known as Research Enterprises during world war II, or to the establishment of any plant to carry on

Cost of Living
defence projects similar to those carried on hy Research Enterprises?


Clarence Decatur Howe: The work of Research Enterprises has been carried on on the same site by Canadian Arsenals Limited. Production, of course, has been on a smaller scale than that carried on during the last war, but the equipment for radar work and for optical work has been retained. Work in electronics has been carried on but on a much reduced scale. At the moment the operation is being expanded to meet present requirements, and the floor space is being supplemented by a new building, now under construction, especially designed for the assembly of early-warning radar sets.


COST OF LIVING
[Stage Direction]
On the orders of the day:
Clarence Decatur Howe: Mr. Speaker, I should like to make a statement about the cost of living index as at April 2, 1951.
Ordinarily this announcement would be made through the newspapers by the dominion bureau of statistics. But in view of the fact that we have just concluded a debate on the cost of living and are still debating the budget resolutions, I thought it appropriate to make this month's announcement in the house.
I shall first read the announcement prepared by the dominion bureau of statistics, and then I shall make a few comments about the price of butter, which accounted for most of the change.
The following is the text of the dominion bureau of statistics official announcement:
The dominion bureau of statistics cost of living index advanced from 179-7 to 181-8 between March 1 and April 2. Nearly one-half of this increase of 1-2 per cent, or 2-1 points, was accounted for by butter which moved to high levels during the latter half of March and the early part of April, and then dropped sharply. The balance of the increase was largely due to other foods, clothing, home furnishings and miscellaneous items. The food index rose from 233-9 to 238-4. There were numerous but slight increases in foods other than butter, although decreases were registered for eggs, pork, and fresh vegetables. The clothing index moved from 196-3 to 198-8 following advances in men's wear and footwear. Increases throughout home furnishings were sufficient to raise the index of home furnishings and services from 188-6 to 190-7. The miscellaneous index advanced from 137-8 to 138-8 as a result of higher indexes for personal care, transportation and theatre admissions. Higher prices in some centres for coke and electricity raised the fuel and light

index from 146-5 to 146-7. Rents were not surveyed during April and the rent index remained unchanged at 137-6.
In the course of a speech in this house on April 9 during the debate on the cost of living, I said that "a preliminary survey of March prices indicates that the index will hold about even during March, or at the worst show an increase for that month of not more than one-half of one per cent". Actually the increase was, as I have already announced, a little more than one per cent.
The forecast of a smaller increase in the cost of living index between March 1 and April 2, anticipated a more rapid decrease in the price of butter than occurred. It was expected that butter prices would fall from the high point reached during the latter half of March to an April 2 price which would have been very close to the March 1 price. Actually, while the April 2 price was well below the March high, it was not until the second week of April that prices had1 again fallen to March 1 levels. If the mid-April price for butter -had been established by April 2, the cost of living index for that date would have shown an increase of less than one-half of one per cent.
Thus, this latest cost of living index increase was largely due to an increase in the price of a commodity which is now selling below the level of two months ago.


Mr. George A. Drew (Leader of ihe Opposition):: Mr. Speaker, I feel sure that hon. members will welcome the fact that this announcement was made in the house, with certain explanations. In view of the fact that it has been made, may I ask the minister if it is his intention to exercise the powers which he -sought under the Emergency Powers Act for the specific purpose of dealing with this problem.


Clarence Decatur Howe: The specific powers sought and obtained from this house in the defence production bill were related to preventing war buying from interfering with domestic distribution. The power is being applied in all basic war materials:	the iron and steel
schedules, the non-ferrous metal schedule, the chemical schedules and the pulp and paper schedules. I can assure the house that there has been no price increase to domestic consumers in those fields as a result of war buying. I suggest to the house that the rise in the price of butter was not owing to war buying.


George Alexander Drew: It seems to me that the Minister of Trade and Commerce misunderstood the question I asked. I was referring to the reason he gave for the extraordinarily wide

powers under the Emergency Powers Act. When he introduced that measure and explained that he had been responsible for its drafting, he also explained that much wider powers were needed in order that, in addition to the control of supplies, he would then have the power to deal with prices as well.


Clarence Decatur Howe: Mr. Speaker, I must correct the memory of the leader of the opposition. The Emergency Powers Act to which he referred was introduced in the name of the Prime Minister, .and was sponsored in this house by the Minister of Justice. I made no statement whatever on the Emergency Powers Act.


Mr. Coldwell:: I should like to ask a supplementary question. Obviously the dominion bureau of statistics makes important forecasts. Has it made any forecast of the effect of new taxation on the cost of living in the coming months?


Clarence Decatur Howe: No. I might explain that the statement I made in the house on April 9 was a forecast of the April 2 position, and made at my request. I realize now that it was unfair to have asked for that forecast at the time because the bureau of statistics had not collected the data. The bureau gave me a running estimate from the situation as they saw it at the time. I have asked them for a statement of the effect of the new taxation on the cost of living index, and they advise me that they are quite unable to make such an estimate.


Mr. Knowles:: May I ask the Minister of Trade and Commerce whether the figure given for April 2 includes any adjustment with respect to rents in the month of March?


Clarence Decatur Howe: I said in my statement that no study had been made of the price implication of rentals. Such a study will be made in June. They are made every three months.


Stanley Howard Knowles: In other words, the rental increase is not reflected in the index except once every three months?


Clarence Decatur Howe: That is right.


Stanley Howard Knowles: April does not include any change. Has there been any change in recent months in the basis of computing the rental index?


Clarence Decatur Howe: No, there has been no change in the basis of the index.


ANNOUNCEMENT AS TO ISSUE OF PERMITS FOR EXPORT TO THE UNITED STATES
[Stage Direction]
On the orders of the day:
Right Hon. J. G. Gardiner (Minister of Agriculture):: Before the orders of the day
Inquiries of the Ministry are proceeded with, and because I have been questioned with regard to the matter on a number of occasions during the session, I think I should, announce here what will come out within the next few hours, namely, the decision to issue permits for the shipment of live hogs to the United States.


TRANS-CANADA HIGHWAY ROUTE BETWEEN ST. BONIFACE AND ONTARIO BOUNDARY
[Stage Direction]
On the orders of the day:
Mr. Fernand Viau (St. Boniface):: I should like to direct a question to the Minister of Resources and Development. Following the visit of the minister and the deputy minister of public works of Manitoba, has that province submitted for approval the shortest practical route for the construction of the trans-Canada highway in the eastern part of Manitoba between St. Boniface and the Ontario boundary?


Hon. Robert H. Winters (Minister of Resources and Development):: While the hon. member for St. Boniface referred to the visit of the minister and deputy minister of public works of Manitoba, I think I should say that the visit was not to me. I did not see them on the occasion of their visit. I can say, however, that at the time the agreement was signed between the federal government and the government of Manitoba, the route between the Manitoba-Ontario boundary and Winnipeg was left pending until the provincial government had an opportunity to make further surveys. To the best of my knowledge, these surveys have not been completed; at any rate, the government of Manitoba has not communicated their suggested route to us.



WAYS AND MEANS

[Stage Direction]
The house in committee of ways and means, Mr. Dion in the chair.

[Stage Direction]
Resolved, that It is expedient to introduce a measure to amend the Excise Tax Act and to provide:
1.	That the rate of the general sales tax be increased from eight to ten per cent and that the rate of sales tax on those articles at present subject to four per cent be increased to five per cent.
2.	That the excise tax on goods mentioned in schedule I of the act, and on furs, that are at present subject to the rate of fifteen per cent be increased to twenty-five per cent.
3.	That the excise tax on candy, chocolate, chewing gum and confectionery that may be classed as candy or a substitute for candy, be reduced from thirty to fifteen per cent.
[Stage Direction]
Excise Tax Act
4.	That there be imposed, levied and collected an excise tax of fifteen per cent on the following goods when adapted to household or apartment use:
(a)	stoves, hot plates, grills and other appliances when adapted wholly or in part for cooking and when designed for using other than solid fuels;
(b)	washing machines operated by electric or other power;
(c)	electric, gas or kerosene refrigerators and freezing equipment and complete parts therefor including coils, condensing or compressor units, motors, cabinets, boxes, evaporators and expansion valves.
5.	That the excise tax on cigarette papers and cigarette paper tubes be repealed.
6.	That the excise tax on the following goods be increased by the amounts shown:
(a)	for each five cigarettes or fraction of five cigarettes contained in any package, three-quarters of one cent;
(b)	for each ounce or fraction of an ounce of manufactured1 tobacco, including snuff but not including cigars and cigarettes, contained in any package, three cents;
(c)	for each ounce or fraction of an ounce of Canadian raw leaf tobacco when sold for consumption in Canada, three-quarters of one cent.
7.	That the sales tax on the following goods be repealed:
(a)	cortisone;
(b)	adrenocorticotrophin (ACTH).
8.	That any enactment founded upon this resolution be deemed to have come into force on the eleventh day of April, nineteen hundred and fifty-one.
The Chairman:: Shall the resolution carry?


Some hon. Members:: Carried.


Mr. Low:: The Minister of Trade and Commerce has just made a statement indicating that the cost of living index has gone up during the past month by 2Vio points. By way of explanation he says that it was because of the unusual advance in the price of butter in March. If I remember correctly, Mr. Chairman, the dominion bureau of statistics figures usually show butter and butter substitutes together. I wondered, although I did not take the trouble to ask the Minister of Trade and Commerce when he made his statement, whether butter and other butter substitutes would not be considered as part of that whole effect which he says butter had on the cost of living. I do know that margarine made quite serious advances in price during that month, and kept quite even with butter in April.
There is one other comment that I should like to make with respect to the things I want to say about the budget resolution. It is this. When the full impact of the budget is made clear, let us say in a period of six weeks or two months, I am satisfied that the Minister of Trade and Commerce will have to show a much poorer picture than he was able to show today. From all that has been said here during the time that we have been discussing the budget and the budget resolutions, all that has been said by the minister and his

parliamentary assistant, it is clear, to me at any rate, that the government thinks it is essential to increase the sales tax by twenty-five per cent, and to levy a fifteen per cent excise tax on such things as stoves, washing machines, refrigerators and other household electric equipment, in order to get revenue for the defence effort.
These taxes are designed for one purpose only, namely, to get revenue, in spite of the fact that the immediate effect of their imposition is to add to the already serious inflation that devastates the people of Canada, and has been doing so for some time. I shall not waste the time of the committee by repeating the arguments that I and many others have already put forward, and put on the record, concerning the adverse effect of these taxes, especially on young people who are trying to get themselves established, and all those who have to exist on fixed incomes as well as those in the lower income brackets.
We have made known the reasons for our opposition to the sales and excise taxes, and it will not be necessary for me to repeat the arguments now. I do fear, however, that very soon the country will be faced with demands from all organized' groups for another round of wage increases. If further wage increases are granted, the cost of living will jump to new extremes. If, on the other hand, the increases are not granted, and especially if no effort is made to curb spiralling costs, along with the denial of further wage increases, the workers and producers of Canada can hardly be expected to feel like working harder and longer, as the minister warns they will have to do.
Let me say right here, Mr. Chairman, that I agree with the minister on that point. There is no way that I can see whereby production can be increased in this country except by all of us working harder and longer; and it is only through greatly increased production that the dangers of inflation can be averted at a time when we have to channel off, for defence purposes, large percentages of the things we do produce.
If Canadians will buckle down to it and will achieve in 1951 and 1952, let us say, as much as a six or eight per cent increase of physical volume of production-that is, of our gross production-it will be the greatest single factor, in my judgment, in bringing down prices and the cost of living. That is, of course, provided that we do not get foolish and allow the materials we do produce to filter away into other countries under foolish policies of one kind and another. But these taxes now, sales and excise, will not contribute in any way, in

my judgment, to an all-out production effort. My judgment is that it will result in discouraging production rather than encouraging it, and for that reason they are especially dangerous just now.
Whenever a government requires revenue, it is only good and common sense to go after that revenue where the money is. This government chooses to get the revenue solely by taxing for it. But the budget resolutions now before the committee propose to go after increased sales taxes and excise taxes in places where the money just cannot be obtained, without serious consequences to the people who are already overburdened with living costs, and who just cannot see how in the world they are going to keep their heads above water. The government has already admitted that single persons need not less than $1,000 and married persons not less than $2,000 to keep their heads above water. As a result the personal income tax exemptions are fixed at these levels.
Having admitted that, however, the minister turns around and seeks new revenue to the extent of $116 million from these people who are already overburdened. Then the minister proposes to tax away this year certain profits which corporations throughout the country have made. I have been making a special study of this whole corporation situation, and I should like to present that picture briefly today by way of showing to the minister that there is an alternative to which he can turn, and quite safely, to get his revenue. There is this alternative to which he can turn, if he actually requires it, although I believe the minister will agree-and whether he agrees or not, he knows I am correct-that when this fiscal year is ended he will have more than the necessary $116 million or $120 million by way of a surplus in revenue. I would bet my last shirt on that. He will have sufficient, and perhaps more than sufficient, to make up for what he proposes to get from these two taxes. I do not think there will be any doubt about that, particularly in the light of the fact that we are living in very buoyant times. Revenues are going to keep up.
I have here a table which I believe would be of interest to the people of this country, and, if it is agreeable to hon. members,, I should like to have it placed on Hansard, so that what it reveals may be apparent at a glance.


Some hon. Members:: Agreed.


Solon Earl Low: In this table I have prepared I use authentic figures from the Canada Year Book and from the budget papers tabled along with the minister's budgets of last year and this year, as well as information from the
Excise Tax Act
dominion bureau of statistics and the Department of National Revenue. This table, which shows the profits made in Canada by corporations after the payment of taxes, is as follows:
Profits Made in Canada by Corporations After Payment of Taxes
Net profits after taxes
Cash
dividends
paid1
abroad and to persons in Canada
Undistributed profits, including refundable portion of excess profits
Years	Amounts	Amounts	Amounts
$ $ ?
1942	
688,000,000	311,000,000	377,000,0001943	
660,000,000	295,000,000	365,000,0001944	
618,000,000	284,000,000	334,000,0001945	
623,000,000	251,000,000	372,000.0001946	
780,000,000	340,000,000	440,000,0001947	
1,104,000,000	502,000,000	602,000,0001948	
1,360,000,000	533,000,000	827,000,0001949	
1,171,000,000	570,000,000	601,000,0001950	
1,402,000,000	672,000,000	730,000,000

Source: Canada Year Book 1948-49, page 1111. Canada Year Book 1950, page 396.
The figures covering years 1949 and 1950 are given on page 12 of budget papers 1950-51.
The above are latest figures available at D.B.S. and the Department of National Revenue.


John Horne Blackmore: Pretty rich pickings.


Solon Earl Low: There are several very interesting things about the statement. The dividends distributed were substantial, and presented a fine picture for the shareholders. Evidently the shareholders were satisfied. But in practically every year, if not indeed every year, the undistributed profits that remained with the companies were greater than the amounts distributed. In the nine-year period the accumulated undistributed profits in the hands of corporations of this country amounted to $4,648 million.


Mr. Abbott:: My understanding is that the hon. member prepared the table, and got his information from the sources mentioned.


Solon Earl Low: Yes. The sources of information are set out at the foot of the table. Then, the minister proposes to tax away $116 million of these profits for this year by way of a twenty per cent defence surcharge on all corporation income payments in respect of income earned after January 1, 1951, exempting the fifteen per cent rate that applies to the first $10,000 in profits. The minister calculates that the surcharge will boost the rate of corporation tax on all profits up to 45-6 per cent.
If a further twenty per cent surcharge were imposed, bringing the minister's defence surcharge up to forty per cent instead of twenty

Excise Tax Act per cent, the yield this year would be $232 million, an additional amount quite sufficient to replace the revenue expected from the increased sales tax and the fifteen per cent excise on household electrical equipment.
Even after boosting the surcharge to forty per cent, undistributed corporation profits would still remain at the staggering sum of $500 million, on the basis of last year's figures. I realize that this is on the basis of last year's figures, and I give them because the figures for this year will not be available until a year from now. However, there is no reason to expect that the level of profits during the ensuing year will be lower than for the last year. As a matter of fact, in his budget the minister expects them to be greater. Under the circumstances I believe we are safe in expecting a profit at least equal to that of this year, and perhaps higher. And remember, the $500 million about which I have already spoken would remain to the corporations after all taxes are paid and after substantial dividends are distributed to the shareholders of those corporations. Under the circumstances I cannot see why the minister should not get the revenue he needs right there where the money is.
These undistributed profits constitute a huge potential reservoir of funds for expansion purposes. Along with the minister, I think it is wise that undistributed profits such as I have mentioned should be there for expansion and resources development. Those things should be financed from this source as far as it will go. I agree with the minister when he says also that during the emergency years ahead he will have to put some sort of curb on reinvestment so as to help keep prices under control. If these $500 million of profits were left, even after a forty per cent surcharge, and were poured out into the field of reinvestment for development or expansion purposes, producing nothing while they are being spent for those purposes, the inflationary effect would be terrific. The minister is quite right when he says that he must impose some sort of curb.
I favour the profit motive to induce enterprise and productive effort. I have always said so. I believe that there has never yet been discovered a better motive for enterprise and productive effort than the profit motive. I do not oppose that motive in any way; but when we are faced with a situation like the present one, when we need revenue, I think we should have no qualms of conscience about requisitioning from the very large accumulations of corporation profits another $116 million, especially when it leaves
[Mr. Low.}
large reserves after the payment of faxes and substantial dividends to the shareholders of these corporations.
. These inflated profits, T would' remind you, were made possible by the condition of inflation that has existed over these past few years. Government tax policies have contributed to the inflation to a considerable-extent, because, as we have already shown, when you increase any of these commodity taxes you are bound to increase the rate of profit, or the amount of profit at any rate, accumulated by the corporations. All these things, while they play into the hands of the corporations of the country, militate seriously against the individual consumer.
I suggest that the consumer would be hit much harder by the proposed tax increases than he would be by the additional corporation tax which I have suggested. It seems to me that the only way that we can give to the taxpayer, the consumer of this country, any sort of relief for the moment is to get revenue from the source I have outlined. Consequently I move:
That clauses 1 and 4 of the proposed resolution be deleted and the following be substituted therefor:
"That it is expedient to introduce a measure to provide for a further defence surcharge on all corporation income tax payments in respect of income earned after January 1, 1951, to the extent necessary to maintain the balance of ways and means."


Douglas Charles Abbott: Mr. Chairman, there may be
some point of order to be raised as to the propriety of this amendment which relates to a tax on -corporations, but I shall not raise it for the moment because Your Honour might want to give some consideration to it. Before you do, there are one or two things I should like to say with respect to the most interesting and thoughtful speech which has been made by the ihon. member for Peace River.
I am not going to repeat what I said as to why I think it is undesirable to further increase corporation taxes at this time. The effective corporation tax in eight of the ten provinces, after the present proposals are adopted, will be over fifty per cent, and in the case of the two central provinces of Quebec and' Ontario it will be something over fifty-two per cent. For the reasons which I set forth in my budget speech I think that at the present time it would be uneconomical and unsound to push those taxes any higher. It would be an invitation to waste, extravagance and inefficiency. I am sure the committee would not want me to again express the views which I have already put forward in my budget speech.

I should like to say just a word about the suggestion that corporation profits are unduly inflated today. I am making no special brief now for the profits of corporations or of any other group in the community. Like my hon. friend I was doing a little bit of investigating as to the results in pre-war days as compared with the present time. I did not go through the war years, as he did, but I find that corporation profits after taxes in 1949 were $1,171 million. That is the same amount as was mentioned by my hon. friend, so I can see that he prepared his figures carefully. I have a comparison of the total corporation profits before taxes in 1939 and 1949. In 1939 the total corporate profits before taxes was $618 million; in 1949 they were $1,898 million. I think it is better to take them before taxes so that we can see what the profits were.
The interesting thing to me was the percentage of those profits to the gross national product. I found that the corporate profits before taxes, expressed as a percentage of the gross national product, were 11-04 per cent in 1939, and only 11-59 per cent in 1949. In other words, they were approximately the same. I think those percentages are extremely significant.
My hon. friend made the point that a substantial amount of corporate profits have remained undistributed. May I say at once that from an economic point of view I think that is an extremely desirable thing. My friend agreed with me on that. Out of those undistributed corporation profits most of the expansion of our production facilities which has taken place during the last four or five years was derived. The figures I have indicate that in 1949 the undistributed corporation profits were $601 million. I think it is fair to say that virtually all those profits have been reinvested in plant and equipment.
My own personal view is that it is not fair to say that corporation profits are unduly inflated in proportion to the increase in gross national production. My own personal view is that the profits which have remained undistributed and which have been reinvested in plant and equipment are performing a useful economic function at this time.
I realize that my friend and I differ as to the economic desirability of imposing additional corporation taxes instead of imposing the spending taxes, the consumption taxes which I have suggested.


Edmund Davie Fulton: Has the minister similar
figures to show the comparative amounts or the actual percentages of corporation profits going into the hands of shareholders as dividends for pre-war and now?
Excise Tax Act


Douglas Charles Abbott: I have them here, and I am glad my hon. friend asked me that question. The dividends received by Canadians, expressed as percentages of total income in Canada, was 3-03 per cent in 1939 and 2-12 per cent in 1949.


Mr. Wright:: The minister indicated that corporation profits in relation to national product-


Douglas Charles Abbott: Gross national product.


Percy Ellis Wright: -gross national product, had not increased to any very great extent.


Douglas Charles Abbott: Not significantly, no.


Percy Ellis Wright: It seems to me that the interesting figure would be one to indicate whether corporation profits had increased compared with capital investment. That is the point. The profits might be in proportion to the gross national product but might be out of proportion to the capital invested.


Douglas Charles Abbott: I have not those figures here. If I may say so, the proportion of profits to capital invested is not a complete criterion, because in a great many enterprises, particularly in service enterprises and other types of endeavour, capital is not the only criterion to determine profits. We recognized that in our Excess Profits Tax Act during the war.
I do not know, Mr. Chairman, that we should get off into a too detailed discussion of corporation taxes under this resolution. I prefaced my remarks by saying that I have a little doubt whether my hon. friend's amendment is in order, but I do not know that I will press that point. I think I should say at once that I would be obliged to vote against It, because I do not consider that from an economic point of view an additional corporation tax at this time would produce the results which I wish to achieve.
I want to add, as I said in my budget speech, that the tax program which I am presenting has two purposes in view. The first is to raise the necessary revenues, and the second is to endeavour to curtail consumption in certain less essential fields which compete with defence requirements.


Solon Earl Low: I should like to make a brief reply to one point the Minister of Finance made. He quite properly says that the undistributed profits of the corporations are a reservoir out of which moneys for investment, expansion and development come. I think that is a proper thing, and I am all for it. At page 1809 of Hansard for April 10 the minister said:
Moreover, we have always relied on undistributed corporation profits to provide a large fraction of the capital required for expansion of our industries. At this juncture in our affairs, with heavy capital


Douglas Charles Abbott: Oh, some of it, yes.


Solon Earl Low: Some, but not all.


Mr. Gibson:: It is not all their money, either.


Douglas Charles Abbott: If my hon. friend will allow
me, obviously my view is that, by taking an additional twenty per cent of corporation profits in taxes, the residue will not in my opinion be greater than is fair and just for payment of dividends-


Stanley Howard Knowles: Not twenty per cent of
profits.


Douglas Charles Abbott: Twenty per cent increase in
the corporation tax-the amount then left will not be beyond what is fair and reasonable for the payment of a return on the shareholders' investment and to remain as undistributed profits forming savings for the increase of capital equipment. Others may differ with me in that view, but that is the view I have taken and the view which I expressed in my budget speech.


Solon Earl Low: I do not know whether the
minister has these figures before him. I was not able to get them, but I am going to continue to try until I do get them. It would

be interesting to know how much of the $600 million undistributed profits accumulated by corporations in 1949 was actually reinvested;
I wonder if there is not some carry-over. What I am getting at is that even if the surcharge for defence purposes were increased to forty per cent it would still leave not a bit less than $500 million of undistributed profits, assuming that the aggregate profits this year will be the same as last-and I think they will be, or more-and assuming also that the same rate of dividend is distributed as was distributed last year. I am asking the minister if he does not think that $500 million is a pretty fair potential reinvestment fund in the light of the forces that he knows are exerting pressure on prices in this country and on the cost of living.


Douglas Charles Abbott: This has been a most interesting discussion, but I think perhaps we should defer any further discussion of the desirability and the economic effects of an increased corporation tax until we are considering that tax. My hon. friend has moved that certain commodity taxes be struck out of this resolution, and that as an alternative there be an increase in the corporation tax.
I am glad he raised the question, because I was interested in what he said. I was glad to put on the record the striking percentages which I gave the committee a moment ago, but I think we should endeavour to dispose of the amendment if, Mr. Chairman, you consider it in order. If we care to pursue further an analysis of corporation profits we shall have ample opportunity to do so when that resolution is before the committee.


Joseph-Alfred Dion: I am sorry to interrupt the debate, but I wish to state that earlier in the debate I allowed a blanket amendment of this kind to be put, although at that time I stated that I would have appreciated a fuller opportunity to study the matter. It now appears that the question was settled by a chairman's ruling on November 10, 1949, when it was made clear that the tax to be substituted must be specific and must clearly preserve the balance of ways and means. As to the amendment actually before us now, the substituted tax is not specific, but is in general terms. In addition, I have doubts as to the relevancy of the amendment on this particular resolution. Therefore I must rule the amendment out of order.


Stanley Howard Knowles: Mr. Chairman, you heard
the point raised by the Minister of Finance but you did not give any opportunity to anyone on this side of the house to speak to the point of order.


Mr. Lesage:: The ruling is there.


Douglas Charles Abbott: Do you think we could let
this procedure point go?


Mr. Fournier (Hull):: This would be the
only time you let something go.


Joseph-Alfred Dion: Order. I have ruled that
this amendment is out of order.


Stanley Howard Knowles: May I point out with
respect-


Some hon. Members:: No, no.


Joseph-Alfred Dion: I am sorry, but the thing
to do is to appeal. The chairman's ruling is not debatable.


Stanley Howard Knowles: May I point out that the Minister of Finance-


Some hon. Members:: No, no.


Joseph-Alfred Dion: Order.


Stanley Howard Knowles: These shouts of "no, no" do not expedite matters at all. The Minister of Finance raised a point of order; at least in opening his remarks he expressed some doubt whether the amendment was in order. He then proceeded to speak to the substance of the amendment at considerable length, and none of us quarrelled with that. In concluding he returned to his suggestion that perhaps the amendment was out of order, and you immediately rose to your feet, sir, and gave a ruling, without affording anyone else a chance to speak to the matter. That is not in keeping with the practice-


Joseph-Alfred Dion: Order. The point of order having been settled, with the unanimous consent of the committee I am prepared to put the amendment. Is there unanimous consent?


Some hon. Members:: No.


Solon Earl Low: What is your ruling?


Joseph-Alfred Dion: There is no ruling.


Stanley Howard Knowles: What is it you are asking unanimous consent for?


Joseph-Alfred Dion: To put the question on the amendment.


Stanley Howard Knowles: Then you are ruling that it is in order?


Joseph-Alfred Dion: No, but the committee is always master of its own procedure.


Solon Earl Low: I think, Mr. Chairman, you would be well advised to rule it in order and put the question; because if you do not, under the circumstances I am going to challenge your ruling.


Alphonse Fournier: Mr. Chairman, the ruling was given, and out of respect to the chairman's position I do not think the hon. member should say what he did. The hon.
Excise Tax Act
member may not threaten the chairman of the committee or any other member of the house. That is absolutely out of order.


Solon Earl Low: I am not threatening the chairman; I am simply saying that if he is prepared to submit the amendment to a vote of the committee it indicates that he is willing to declare it in order.


Joseph-Alfred Dion: No. I gave my ruling, but the committee is always master of its own rules. With unanimous consent the question may be put, but my ruling is still there. If there is not unanimous consent the ruling stands.


Solon Earl Low: Very good; then I must challenge your ruling.


John Horne Blackmore: The steamroller will take care of that.
Mr. Speaker resumed the chair, and the chairman of the committee made the following report:
In the committee of ways and means I ruled that an amendment in general terms which does not set out a tax of specific amount was out of order in respect of a ways and means resolution.
Mr. Speaker put the question as follows:
The question before the house is an appeal from a ruling given by the chairman of the committee of ways and means. Mr. Dion of the committee of ways and means has reported to me that he ruled that an amendment in general terms which does not set out a specific amount is out of order in respect of a ways and means resolution. From this ruling Mr. Low has appealed.
Those in favour of confirming the chairman's ruling will say yea.


Some hon. Members:: Yea.


Mr. Speaker:: Those opposed will say nay.


Some hon. Members:: Nay.


Mr. Speaker:: In my opinion the yeas have it.
And some hon. members having risen:


Mr. Speaker:: Call in the members.


George Alexander Drew: Mr. Speaker, I wonder if it might be possible to make a comment on the situation that has arisen. I think there is an unusual aspect to this matter in view of the fact that each of these rulings establishes some form of precedent. I believe it should be a matter of record that the Minister of Finance did raise a question in that he said he was not sure whether the proposed amendment was in order or out of order. Then he said he would proceed, and he did proceed.


Douglas Charles Abbott: I raised the point of order, and while the chairman was considering it I proceeded.


George Alexander Drew: I am not questioning the propriety of the course followed by the Minister of Finance. He proceeded with his remarks,



Excise Tax Act and then the chairman came to a conclusion.
I do suggest that there is more in this vote than simply approval or disapproval of the ruling of the chairman. I think there is the question of approval or disapproval of the way the ruling was presented, because before anyone had an opportunity to express his views, other than the minister, the ruling was given.


Douglas Charles Abbott: I expressed no views on the point of order. I doubted the merits of the amendment.


George Alexander Drew: I have said that, and I am pointing out-


Stanley Howard Knowles: And the ruling did not relate to the point of order raised by the minister.


Mr. Speaker:: Order. Though this discussion is out of order I must maintain order while it is taking place.


George Alexander Drew: I want to point out that if a practice of that kind were followed a procedure could be established under which a minister or anyone else could make a statement and then discussion could be ended, without anyone else having an opportunity to express an opinion. I believe there should have been an indication that a ruling was going to be made so that comments might be heard before the ruling was given. Rather than voting on the question of the ruling itself, therefore, I propose to vote against it on the ground that it was presented without any comments being heard.


Mr. Speaker:: Does the house still wish to have a recorded vote on the ruling?


Some hon. Members:: Yes.


Mr. Speaker:: Call in the members.


Joseph-Alfred Dion: Excise Tax Act.


George Alexander Drew: I wish to deal with a point of privilege before dealing briefly with the remarks of the Minister of Finance in regard to the matter now under consideration. Before the orders of the day were called I had directed a question to the Minister of Trade and Commerce, and asked whether it was the intention to exercise powers which the house had been told were provided for expressly by the Emergency Powers Act. Some question was raised as to my interpretation of the explanation given by the Minister of Trade and Commerce. For that reason I should like simply to remind the committee that the Minister of Trade and Commerce did explain that, because of his experience, he had assumed responsibility for the drafting of the bill. I would point out that before the bill was actually before the house the Minister of Trade and Commerce had explained why it was that we were having a new emergency bill brought before us to replace the emergency bill adopted last September. I would just recall these words, as reported at page 185 of Hansard of February 8.


Clarence Decatur Howe: May I interrupt and ask
whether the hon. gentleman is talking about the emergency powers bill?


George Alexander Drew: Yes.


Clarence Decatur Howe: There was a second bill-I do not recall the name of it. It was introduced in the name of the Prime Minister, but I piloted it, and it was not the emergency powers bill.


George Alexander Drew: It was the emergency powers bill, the bill that superseded the bill passed last September.


Clarence Decatur Howe: That bill had a different name, I think.


George Alexander Drew: Excise Tax Act
equal force to every other tax which is on a percentage basis. Certainly it applies with greater force to a tax which has its most direct impact upon those who are the least capable of bearing that tax.
The resolution before us is one embracing eight different paragraphs. An attempt was made to have them taken up separately, but at this time I am not questioning the ruling on that point. I would point out however that we are asked by the resolution to say that it is expedient that the rate of the general sales tax be increased: from 8 to 10 per cent. We have stated we dio not believe it is expedient, and since the resolution cannot be divided; we have no choice but to vote against it-


Douglas Charles Abbott: Quite right.


George Alexander Drew: -although, in doing so, we must vote against other parts covered in the same resolution which we admit we cannot possibly deal with individually at this time. Therefore I wish to have it clearly understood! that in voting against the resolution we are voting specifically against those taxes which we have said are uneconomic and unsound, and; which should not be applied at this time.
In regard to the 25 per cent increase in the sales tax, we say that in all earnestness we are pressing the Minister of Finance to withdraw that tax. We claim the budget speech and the whole of the details in the budget make it perfectly clear that there is going to be another surplus, if the predictions of the Minister of Finance are carried out, and that for this reason the imposition Of the tax becomes unnecessary.
In saying that I recognize immediately that the declared surplus in the budget is not adequate to replace this tax. But when the Minister, of Finance projects a $20 billion gross national product I say most emphatically that if that prediction is carried out the surplus will be much greater than that now predicted. That being so, there is no necessity for the tax, and! therefore it becomes possible to oppose * it without bringing forward any alternative measure. We say you can do without it, and we say this is the time to do without it, because you are imposing a highly inflationary tax at the very time when inflation is threatening our whole social structure.
The Minister of Finance has not indicated a recognition of what the imposition of this tax means to the people of this country at the present time. There are a number of reasons why the tax should not be imposed. Granted that most of the arguments against this increase would also apply to the tax
[Mr. Drew.l
of 8 per cent already in existence, we must keep in mind that some of the strongest unreserved criticisms of that tax in the past have been by members of the party to which the Minister of Finance belongs. Some of those criticisms of the tax were expressed in terms so extreme that if I were to use them myself today I would be charged with being irresponsible in the discussion of the tax.


Solon Earl Low: They could not be printed.


George Alexander Drew: Some of those statements could not be more extreme, and they came from the highest authority in the party to which the minister belonged: at that time. If those, arguments are sound, then undoubtedly it would be well for us to re-examine the whole tax. But at the present time we are asking simply that the increase for which provision is made in this resolution-and that is all we have before us now-be reconsidered. Consideration as to whether there should be a general revision of the sales tax is something we can more properly discuss at some other time.
Our position is that the budget as prepared will more than take care of the expenditures projected for the coming fiscal year, if the gross national product estimated by the Minister of Finance is in fact realized. That being so we say that the increase in the sales tax should not be brought into effect.
I ask the Minister of Finance to recognize that we are putting this argument forward in the earnest belief that the government will indicate its recognition of these pressures-pressures made even more clear by the very announcement made in the house this afternoon by the Minister of Trade and Commerce respecting the last cost of living index. Let me anticipate any suggestion that the announcement that there has been an increase of over two points does not in itself increase the pressures. It increases the pressures, and for this reason: it increases them for the very fact that it is made clear to the people of Canada that, according to the latest official record, the cost of living is still on the way up, thus maintaining those pressures for unnecessary buying and other acts of that kind which in themselves are highly inflationary. At the very time when we have had an announcement of a further substantial increase in the cost of living index is the time for the government to recognize that there does come some critical point beyond which it cannot increase this tax without imposing an uneconomic burden. We believe that point is past, and we ask the government not to

impose this tax. We believe that can be done without imposing any tax in substitution for it.


Mr. Harris (Danforlh):: Mr. Chairman, we have all listened with keen interest to what has happened this afternoon. I could not help feeling however that the discussion has strayed somewhat from the excise tax. We have been discussing something else. My impression was that the resolution before the committee was the one dealing with the Excise Tax Act.
I recognize the reason for this tax. I know the money is needed, and I am in agreement with this method of raising money. To my mind the most important feature to be kept in view is the fact that the cost of living has been going up by leaps and bounds, while the pensions of old age pensioners, and payments made to others, seem to remain more or less stagnant. Therefore I am most anxious to see every possible dollar raised, whether it be by way of an excise tax or one on undistributed profits.
I am at a loss to understand why an hon. member from Alberta should be the one who would suggest that undistributed profits is a proper field for further taxation, when we realize that there is no province in Canada which requires more urgently moneys accruing from undivided profits for the development of its industries than does the province from which the hon. member for Peace River comes.


John Horne Blackmore: We need money for our poor people, too.


Joseph Henry Harris: In the thirty years I have been here in this House of Commons I have never made a set speech. I rely on the hon. members who are listening to let me state some common sense once in a while. I sometimes wonder whether I am capable of expressing that. It reminds me of many long years ago when I was six years of age and I took the hon. member for Frontenac-Addington by one hand, and the hon. member for York East by the other, and we all toddled off to the little red school house. I was asked to get up to recite a piece after the teacher had drilled us in what we should say. I remember standing on the little platform while a little mouse crept out from a hole in the floor. I remember so well rising and saying:
I have a little friend who lives in my mouth,
He's as red as a rose and as warm as the south;
He has only one leg, but how quickly he goes;
My little friend tongue, as red as a rose.
I hope I did not have my little friend tongue in my cheek this afternoon when I registered my vote. I do not think I did
Excise Tax Act
because I am as satisfied as I stand here that I would sooner vote with the hon. member for a tax on undivided profits or corporation earnings or depreciation reserves than I would vote for an increase in the cost of living brought about by this 25 per cent increase in the sales tax. Someone in the chamber has said that this is a tax on the poor man. Mr. Minister of Finance, I am just as sure as I stand here that this is a tax on the poor man. Charge another dollar or two for each bottle of whisky we buy, whether we consume it ourselves or buy it for our friends, and put that into the treasury. Do that by all means.
The hon. member for Peace River was exploring around to find some way to offset the cost of living, and to make sure that pensions would keep some sort of pace with the cost of living. That is what I want to see happen. Not necessarily right up with it, but the compensation to pensioners should drag along with it. Let us have an objective in mind. If the cost of living goes up 50 per cent, 60 per cent or 80 per cent, why cannot this honourable government produce the mechanism and the mechanics within the confines of its organization to follow along?
If butter goes to 80 or 90 cents per pound, we have to buy it just the same. But pensions remain stagnant. To win an election you put out the baby bonus, and I suppose to win another election you can put out this new old age pensions scheme. I do not mind them playing with babies, as I love to play with them myself; but I object strenuously to any government or any individual playing with the finer sensibilities, as far as finance is concerned, of our older people. I think that is something-I am happy the Prime Minister is in his seat-that should receive prompt attention.	[DOT]
I plead with the right hon. Prime Minister to see that this Excise Tax Act which we are considering this afternoon produces immediately sufficient revenue so that the ideas that are in his heart and mind today with regard to looking after the old age pensioners will be accomplished long before he declares we are going to have another election in this country. It was rumoured that the baby bonuses were used to help win an election. God forbid that old age pensions should in any way whatsoever be used for a similar purpose. If they are, that action will react and boomerang against those who use it. I am hoping that that will not be resorted to.
Going back to excise taxes, I say to you, Mr. Minister of Finance-I am glad to see you smiling a little bit, as I like to see you in that mood-that your predecessor, the Hon. Charles Dunning, was not quite so happy

Excise Tax Act
when a proposition was made to him when he was sitting where you are now sitting with regard to how he, in common with the United States, could raise millions of dollars for revenue without hurting any particular industry but helping one industry that was native to this country. I refer to the Bailey amendment of 1936 passed in the United States which placed an excise tax of three cents per pound on every pound of vegetable oil imported into the country; as high as four and a half cents per pound and now one and a half cents per pound, with a quarter cent per pound duty. My reference to that indicates to my mind that the Minister of Finance missed an opportunity to raise anywhere from $2 million to $10 million by omitting to place an equivalent excise tax on the tremendous and ever-increasing imports of vegetable oil from Asiatic countries like Sumatra, Nigeria and Ceylon where the little pickaninny runs up a tree and shakes down a fruit which produces from 40 to 50 per cent of fats while the milkmaid in a dairy milks the dear old cow strenuously and gets only four to five per cent of the constituent butter fat, a part of margarine, if you want to call it margarine, which sells for 40 cents per pound, as my deskmate tells me.
What is it worth? Find out for yourself. When I was in Ceylon some time ago I saw what it is worth. I saw 15 pickaninnies, none over 12 years of age or weighing over 60 pounds, feeding into the trunk of a tree driqd out coconut which was producing 20 to 30 to 40 per cent of oil. The old mother sat on the veranda with a stick keeping them going and another boy kept the donkeys or burros moving. There were six of them, four being on the end of a pole going around and around . while the pickaninnies dropped in dried quarter sections of coconut and the oil was running out of the bottom of the stump into a four gallon discarded can which had originally belonged to the British navy or army or something.
I saw the father going down the road with a two-wheeled cart and a donkey in front dragging that black-as-muck coconut oil to the village. 1 saw them loading the oil on a ship to be shipped over here. I saw something else a few years ago which should make the members from Montreal stop and give some thought to the matter. I saw a tank steamer so heavily burdened with peanut oil from China at a cost of less than 3 cents per pound that she could not pull alongside the dock to unload. They had to lighter the ship in Montreal harbour. This was some years ago. The price is proportionate since but it is not 90 cent butter although it takes the place of it. They had to lighter the ship

in the harbour before they could pull it up to any dock in the city of Montreal to unload it. They unloaded it and the product was sold in Canada around 3 cents per pound. If my friend from Fraser Valley can unload creamery butter to compete with that he is good. It cannot be done.
I say to the Minister of Finance we missed a golden opportunity this year, when he needed excise taxes and money to pay all the current liquid indebtedness, in that we did not put ourselves at least on a parity with the United States and take a cent and a half a pound on every pound that came in. We would never have missed it. It would not have affected the price of butter. You would have had the money in the treasury, and I do not think very many people would have complained much about it. It is all on the record. I see that the well has gone dry. There is no water on my desk. We had better put a $2 tax on whisky and hope it will go dry too, and we will save the minister having to pass these rules.
Some ten or fifteen years ago we were exporting great quantities of bacon to the British market and the British people had control of the bacon situation. We in Canada were a bit worried that they might put some sort of tax on our bacon going into that country. We would have had three to four and a half cents a pound on vegetable oil coming into this country, and when you get above 200 or 300 million pounds a year of a cheap commodity of that kind made by cheap labour you cannot possibly compete against it. Let us be sensible about the matter. The product from which butter is made, milk, at the very maximum only produces 5 per cent butterfat. It is a pretty good cow that will give 5 per cent. I never saw one that would. It is more likely four and a half. When you try to compete against coconuts that produce 40 pounds of fat per hundred you just cannot compete.
The purification process used does not produce a loss of more than one or two per cent in the refining process. It is the simplest thing in the world to refine it. You can hydrogenate it to any consistency you wish from limpid water in the lower grades of the fatty acids up to a consistency as hard as oak by a simple chemical process which does not take anything away from the weight of the product. When you get it to the consistency where you want to use it as a substitute for lard, margarine or butter, then all you have to do is stop your hydrogenation process at that point. I do not like quoting figures, but I was told five minutes ago that margarine is selling at 47 cents a

pound. I should like to know whether there is 15 cents worth of vegetable oil in that 47 cents.
I should like to know what portion of the 47 cents is used for the high pressure advertising which comes over the radio and is to be found in every newspaper you pick up. As a chemist, which is my profession, I know that the product is inert and pure. I do not know anything about its vitamin content, but in these modem days vitamins can be added to the product, so they say. I take a vitamin pill once a day myself, although I do not know why. They say they can add vitamins to the product. I know that it is doing a job but I know that you do not grow coconut trees in Canada. I know that you do not have much success raising peanuts in Canada. I know that you do not have much success raising palm nuts or palm fruit in British Columbia. We are not in that particular temperate zone. Let us be sensible about it. Let us be at least half as sensible as our friends in the United States.
Even when we are hard up-and we are not as hard up now as we deserve to be- at least let us make sure that we keep pace with our commitments to deserving pensioners of all kinds. I make a special plea for old age pensioners because I am reaching that category myself. I am particularly anxious that we balance the budget. In considering the Excise Tax Act, I say to the Minister of Finance in as kindly a way as I possibly can that we are very happy that he has had surpluses, but anyone who has had the privilege of preparing a budget, no matter how small the business venture is, deserves to be criticized by his board of directors if he has a far greater surplus than he should have. I level that criticism at the Minister of Finance at this stage. I say to him in the same breath that with the cost of living so high, with the world picture so disturbed, with a background of three or four budgets as a result of which there were surpluses, this is not the time to budget for any very substantial surplus. If we had had deficits for the last four years I would not have made that remark, but I think, with the experience that the Minister of Finance has had, this is not the time to budget for a surplus.
This is a time when he should try to come out more even. This is a time when he should give some consideration to all the elements that go to make up our taxation system. This is a time when he should not disturb those who find themselves encumbered by paying that extraordinary 25 per cent increase in the sales tax. I think the second avenue I
Excise Tax Act
mentioned might have been explored, namely, vegetable oil. Perhaps I am guilty for not having brought it to the attention of the Minister of Finance in the debate on the address in reply to the speech from the throne. Nevertheless we are on the record and two or three of the hon. members opposite me-I can see three of them in one glance-supported that issue right from the drop of the hat. We won our case before the tariff board and, as I said before, the only reason it was not imposed at that time was the fact that we did not want to disturb the British bacon market. I do not propose to move an amendment but at the same time I respectfully draw this matter to the attention of the minister and ask him to give some consideration to it. At the same time I again declare to you, sir, that I am opposed to this further increase in the sales tax for the reasons I have enumerated, and I hope that the minister will be able to see others.


Mr. Thaicher:: Last Tuesday evening I
expressed opposition to this tax and suggested an alternative which I felt at that time was a reasonable one. I think the announcement made by the Minister of Trade and Commerce this afternoon that the cost of living index has now gone up to 181-8 makes it all the more important that we do not pass this amendment to the Excise Tax Act. If we do I think it is reasonable to suppose that in the next month the cost of living index will probably rise three or four points instead of two points as it did in the past month. It is pretty obvious from the debate that has gone on that members in all parts of the house do not like this tax, but some of them at least feel it is necessary because of the need for revenue. It is interesting to note that in introducing the tax-I am referring to paragraph 4, which imposes the duty on appliances-the minister said that tax was needed specifically for revenue. I quote from page 1812 of Hansard:
I regret that we can no longer afford to leave these entirely free of extra tax-
Later he went on to point out that this new tax would yield a revenue of $16 million. Like the leader of the opposition and others who have spoken, I feel that this tax might well be waived without giving us a deficit. I believe there is going to be a surplus sufficiently large that this tax may not be needed. But if we do accept the minister's statement that he must have this revenue I believe there is an alternative in the capital gains tax which would be less harsh on people in the lower income brackets.
I say at once that I do not like the thought of a capital gains tax in Canada. As the parliamentary assistant pointed out the other evening, there are numerous disadvantages

Excise Tax Act
in that it would be hard to administer, and it would probably discourage risk capital. But I suggest that even with those disadvantages it would be better lor the Canadian people as a whole to have a modest tax of that kind than the very harsh tax contained in paragraph 4 of this resolution. The other tax may be completely undesirable, but still it would be better than the one proposed. The parliamentary assistant suggested that the experience of the United States in connection with the capital gains tax had been very unfortunate. That may be quite true; yet it cannot be completely impracticable because there has been such a tax on their statute books since 1924. Some hon. members may wonder how the tax works there. As I understand, capital gains made by individuals or companies from the sale of any type of property other than normal stock in trade are subject to the tax.


Douglas Charles Abbott: I do not like to interrupt my
hon. friend but if he will permit me I should like to raise a point of order. I really think a discussion of the capital gains tax would be very much more appropriate under the income tax resolution or bill. My hon. friend has put forward the view, as he is entitled to under this resolution, that we should have a capital gains tax instead of a commodity tax as is suggested here; but I suggest that a discussion of the merits of the capital gains tax or the economic impact of such a tax should be carried on under the other resolution. If we do not proceed in that way I really begin to despair of ever reaching any finality in the discussion of these resolutions.


Wilbert Ross Thatcher: I am inclined to largely
agree with what the minister has said. However, in a moment or two I am going to move an amendment which would substitute the capital gains tax for paragraph 4 of the resolution. Therefore I feel I have to give a little explanation of what I am trying to do.
I was saying that in the United States short-term gains, those made in six months or less, for income tax purposes are treated exactly as though they were additional income. Long-term gains are taxed at the rate of twenty-five per cent. I say at once I do not think that would be necessary at this time in Canada, but I do suggest that there is a place in our income tax structure for a modest capital gains tax. Therefore I move:
That clause 4 of the proposed resolution be deleted and that the following be substituted therefor:
"That it is expedient to introduce a measure to impose taxation on capital gains to the extent of $16 million so as to maintain the balance of ways and means."
[Mr. Thatcher. 1


Douglas Charles Abbott: I suggest, Mr. Chairman, that your earlier ruling with respect to the amendment proposed by the hon. member for Peace River applies to this amendment as well.


Wilbert Ross Thatcher: Oh, no; the amount is
mentioned here.


Joseph-Alfred Dion: I will put the amendment
to the committee.


Stanley Howard Knowles: But no ruling yet.


John Lambert Gibson: I was just wondering if the
minister was going to reply to the suggestion of the leader of the opposition that he actually did not need this extra revenue. The leader of the opposition suggested that the minister was going to have a substantial surplus, and I am rather inclined to think he may be right, going by our experience during the last five years when we had very substantial surpluses that were not anticipated. I wonder, too, about the suggestion I made to the parliamentary assistant the other evening, as to whether any consideration was given to broadening the base for the application of the sales tax, rather than increasing it. It seems to me we have done some very good things in removing the tax. We have taken it off electricity, for instance, but on the other hand it seems to me that electricity used in business signs such as those advertising beer, for instance, might well be made subject to the sales tax. Then I think of building materials, from which the tax was removed. At the same time about half our building materials go into construction used for entertainment.


Douglas Charles Abbott: Most of it is free of sales tax.


John Lambert Gibson: That is what I say. After all, a tremendous amount of building material goes into structures which definitely could not be classified as essential. So I was wondering if the minister had given consideration to broadening the base of this tax. As the Minister of National Revenue knows, he has a book about a foot thick listing all the things that are not subject to sales tax.


Douglas Charles Abbott: I am glad to answer my hon. friend's questions, because I have always conceived that the major function of this discussion in committee is to answer questions rather than to make speeches. As to his question whether consideration was given to broadening the base of the sales tax, I have taken the position that with the exception of cortisone and ACTH there would be no further extension of the exemptions. Now to answer the question as to whether I intended to reply to the point raised by the leader of the opposition, that I was raising more money

than I needed, I have attempted to reply to that matter on at least a dozen different occasions. 1 have stated my considered view that I am not trying to raise more than I need. I try as much as I can to avoid repetition. I am willing to sit here and listen to views reiterated time and again, but I really do not feel that I should detain the house by answering those points more than once.


Mr. Cruickshank:: I do not know whether or not I am in order, but I shall proceed until I am told I am out of order. Strangely enough, I am not going to talk about frigid-aires or anything like that. I am going to be very brief, but I should like to say a word or two about the dairy industry, in connection with the excise tax on imported vegetable oils. I would like to move an amendment, but in view of your ruling, Mr. Chairman, apparently I am not entitled to do so.
In my opinion the dairy industry is rapidly being put out of action in Canada. I am surprised that far more interested and more capable speakers than I, coming from Ontario and particularly from Quebec, have not emphasized that matter already. Apparently the government do not fully realize the seriousness of the position of dairymen in Canada. Apparently the Canadian Manufacturers Association and the bankers association do not appreciate that the dairy industry is rapidly being wiped out of existence. It may not sound very important to some people, but in the years to come I think they will find just how important our 550,000 dairymen are to this country. I know I am supposed to be a little hipped on margarine, but in what I have to say I am not going to discuss its merits or demerits except to the extent that it is affecting the dairy industry. Some years ago I endeavoured to the best of my ability to prevent either the sale or importation of margarine in Canada, because representing a constituency with a large dairy industry, and going on the advice of those who had made a study of that industry, I could see the effect it would have. For the life of me I cannot understand why the Department of Finance has not put a tax on imported oils. I well remember when the hon. member for Moose Jaw brought up the matter of restrictions that were put on the importation of small automobiles from England. That was soon brought into effect by the Department of Finance in order to protect the motor industry.


Wilbert Ross Thatcher: I was objecting to it.


George Alexander Cruickshank: I said the hon. member brought the matter up, as he would know if he would just listen carefully. For all I know, it was necessary that the action be taken that 80709-169*
Excise Tax Act
in fact was taken by the government in that connection. My point with regard to it is this. We act quickly when the matter concerns motor manufacturers; and we act quickly when it concerns textile manufacturers.


Mr. Byrne:: It was necessary.


George Alexander Cruickshank: I am not saying that it was not necessary. I am glad I am going to have some assistance from an hon. member from a mining district who is not as interested as are some other hon. members from Saskatchewan and Ontario in the manufacture of butter. I do not say it was not necessary to the employees or to protect the manufacturers. What I say is that the Department of Finance immediately grasped the subject and took action. The textile producers are well protected and well cared for. But apparently the dairy industry in Canada is to be thrown to the dogs. Is it not worth while protecting? It must not be forgotten, Mr. Speaker, that these vegetable oils, which are imported and used; in the manufacture of a substitute for butter in the form of margarine, can also be used to manufacture ice cream, milk for sale for human consumption over the counter, and other diairy products. The ruling of the privy council was adverse to the welfare of the dairymen of Canada. Apparently the long view has not been taken to protect this industry of over 500,000 actual dairy farmers and, I understand, many thousands of small creameries. But for the benefit of five or six manufacturers of margarine, this cheap oil is allowed to be brought in. For the benefit of one of the New Brunswick members, may I point out that I am not saying whether margarine is good or bad in this case. I am trying to speak purely for the benefit of the dairy farmers and creameries.
Nobody can tell me that we produce coconut oil in Canada. Last year we brought in roughly 10 million pounds of coconut oil- and I am speaking of pounds, now-produced by the class of labour described by the hon. member for Danforth. I wish the government would see fit to send me on one of these trips, so that I might view these things at first hand. I am still hopeful that I shall be sent as an envoy across to Hull or to some place at an equal distance, with all expenses paid.
I have here some figures with regard to the consumption of oils and fats in margarine, January-September, October-December, and total for 1950. These figures are in thousands of pounds, and all figures are on a refined oil basis. This is going to take a

Excise Tax Act
little bit of time; but in a limited way and, I will admit, with limited ability, I am trying to say something which I think is of great importance at this time if we are to admit openly, as apparently do those who prepared part of the budget, that we are willing to throw the dairy industry to the wolves in Canada. These figures are of vital importance. As to vegetable oils, from January to September, 1950-and these figures are in thousands of pounds-we put into margarine 5,621,000 pounds of coconut oil; in the fourth quarter, the figure was 2,236,000, making a total of 7,857,000 pounds of coconut oil that went into margarine in the year 1950.
Possibly some of the hon. members who do not believe in protecting the dairy industry know where they can produce that coconut oil in the Dominion of Canada; but I may say that I do not know. Certainly it cannot be produced in the Fraser valley. Then as to cottonseed oil-and I should like to know where that oil is produced in Canada-from January to September, 1950, 32,717,000 pounds were used in the manufacture of margarine, and in the fourth quarter, 9,389,000 pounds, making a total of 42,106,000 pounds.
I now come to soybean oil. A certain amount of soybean oil is produced in Canada. We had better look to the Minister of Finance ^because he has these experts who know all these things. They must know all these -.things or how could he not arrive at an excise tax on imported oils? He therefore would have right at his finger tips the figure as to how much soybean oil was produced in Canada. The total amount used in margarine last year, was 18,187,000 pounds; and the total amount of sunflower seed oil so used was 3,178,000 pounds and of other vegetable oils, 965,000 pounds.
As I see it, Mr. Chairman, the matter boils down to this question: Is the dairy industry to be maintained in Canada or is it not to be maintained? There is no other alternative. This has nothing whatever to do-and I again repeat it-with the merits or demerits of margarine. The question simply is whether it is worth while to maintain the dairy industry in Canada or whether it is worth while to build up a vast fortune for some six concerns, as the hon. member for Danforth says. He knows better than any other member of this committee the details of this business. Through experience, he knows the details; I do not. I doubt if any other member in this chamber knows the processing details in connection with that particular line of business. I do not know what the solution is, but
[Mr. CruickshankJ
I would certainly have an amendment, if it would be in order, to the effect that an excise tax be put on these oils.
Mr. Chairman, when it is said that this is a cheap substitute for natural butter, I would just ask you to bear in mind that when butter went up in price these oils imported in 1950, which went into the manufacture of margarine, went up; and up went your margarine three cents a pound. Just remember that, Mr. Chairman.


An hon. Member:: Ten cents.


George Alexander Cruickshank: Ten cents or whatever it was. I think every hon. member in the chamber will agree with me that it is obvious that this product, which was supposed to supplant butter with those who were unfortunately not able to pay the price that butter had reached, namely margarine, went up in price after that oil was imported; and as I pointed out, some ten million pounds of coconut oil alone from the cheap producing countries was used, with no excise tax whatsoever. It just does not make sense. Either the government, through the Minister of Finance, will have to admit that the dairy industry is to be thrown to the wolves or that it is not.
I am getting a little interruption here. Never since I have been here in the House of Commons have I been as serious about anything as I am with regard to this matter. I regret that I have not the ability to put before the committee what I should like to put before it. I hope that hon. members from Quebec and Ontario particularly will follow me and speak along these lines. I was sent back here to represent dairy farmers in the main. I myself own a dairy farm. I realize that my dairy farm and others in my riding are rapidly losing their value, as such, and1 will continue to do so if we are going to permit these oils to be imported as they have been. What would have happened if that experiment in west Africa, I think it was, had been successful with regard to peanut oil? Any hon. members who have read the history of that experiment know the quantity of peanut oil that could have been produced, and the cost at which it could have been produced, and the price at which it could have been sold. The hon. member for Danforth mentioned peanut oil. I have not here the figures as to the quantity that has been imported. Is that to be continued? If one of my colleagues were here he would say: I thought you were a free trader. I am still a

free trader, but we cannot have free trade just for one class of producer and not for others.
Speaking from memory, I believe we are permitted to bring in hay driers, litter carriers, and one or two other items, from the United States free of duty. In the current year that will not affect more than fifty farmers in my riding, but tens of thousands of farmers will be affected if vegetable oil is permitted to be brought in without a suitable tax being put on it. It is unfair competition. To carry it a little further- I do not like quoting figures, but incidentally these are authentic figures prepared in the bureau of statistics. Some of them were prepared through the courtesy of the dairy council of Canada. Incidentally, the dairy council of Canada represents all the dairymen of Canada, irrespective of where they come from. That council is guided by very responsible men, and they are particularly worried at this time, as they see the situation, as to whether the industry will be able to continue. Do not forget that the dairy industry does not include merely butter. It includes cheese, etc., and the necessary milk for human consumption on the fluid market.
For the year 1949-that is the latest year I have-the ratio of cows to population was as follows: Prince Edward Island, 2-1; Nova Scotia, 6-6; New Brunswick, 5-1; Quebec, 3-5; Ontario, 3-5; Manitoba, 3-2; Saskatchewan, 2-4; Alberta, 2-8; British Columbia, 11-9; average 3-7.
I cannot conceive why such a responsible organization as the Canadian Chamber of Commerce, which is familiar with all the bank reports published every month by the responsible heads of these banks, have not realized that it is not just a question now of talking about whether we like margarine or not. We are now talking about an industry that affects over 500,000 farm homes alone, as well as additional homes that are concerned in other ways with farm production. I am going to quote what the parliamentary assistant said, as reported at page 2595 of Hansard:
We must give some incentive to the people to put their money into venture capital, in our mines, in our forests, in aluminum plants and things like that.
Since these words were used by the parliamentary assistant to the Minister of Finance in this discussion I presume he was speaking for the Department of Finance. If that is true, it is not unreasonable for the dairy farmers to ask that they be given reasonable protection against the importation of oils which are produced in cheap labour countries
Excise Tax Act
on cheap land, with low taxes, and by people on a low standard of living. If the parliamentary assistant was expressing the policy of the Department of Finance in that connection, which he must have been-and I have no quarrel with his statement-surely it should carry forward and protect the dairy farmers of Canada. Always remember that of all the farmers in Canada the dairy farmer works the longest hours 365 days a year. He is-and I think even my wheatgrowing farmer friends will agree with me in this-the backbone of agriculture in the country. I am sorry that I cannot move an amendment. More than ever during my term in parliament I regret the fact that I have not the ability to put before the government and before parliament just how serious the matter is in my opinion. Either we maintain the dairy industry in Canada or we do not.


Douglas Charles Abbott: I wonder whether I may say
a word. I did not want to interrupt the hon. member for Fraser Valley. He prefaced his remarks by saying he wondered whether he was in order. I do not think he was. I must confess I did not think my good friend the hon. member for Danforth was strictly in order either, but since he had made his remarks-


Joseph Henry Harris: I want to know at
what stage I was not in order. I was very circumspect, very careful to stick to excise taxes, pointing out why they were being raised. I resent the Minister of Finance saying that I was out of order.


Douglas Charles Abbott: In order to explain that, Mr. Chairman, may I say it seemed to me that in suggesting import duties on vegetable oils it would more properly come under the resolution dealing with customs. I do not want to get into any quarrel with my hon. friend.


Joseph Henry Harris: On a point of
order, if I may; I never for one moment suggested that a quarter of a cent a pound import duty be placed on vegetable oils. I say to the Minister of Finance that I recommended only an excise duty in a like manner as happened in 1936 under the Bailey amendment in the United States, which put an excise duty on vegetable oils going into the United States, but omitted entirely an import duty.


Douglas Charles Abbott: I am not going to argue the
point, but I am expressing the hope that we may not have to conduct here a debate as to the position of the dairy industry. Let it be understood at once that I am expressing no

Excise Tax Act
views as to the position of the dairy industry. I was born and brought up in one of the best dairy sections of Canada.


Joseph Henry Harris: I was very careful not to mention the dairy industry at any stage.


Douglas Charles Abbott: I am now referring to the
remarks of the hon. member for Fraser Valley. I am just suggesting, Mr. Chairman, that we should try to restrict our comments to the excise taxes to be imposed-


Joseph Henry Harris: That is what the
member for Danforth did all the way through.


Douglas Charles Abbott: We will assume he was quite justified. There will be a 10 per cent sales tax on vegetable oils and on margarine of course, because both of these products are subject to sales tax. And if anyone wants to direct his remarks to that phase of it I think he will be strictly in order; but I do express the hope that he will not get into a discussion as to the position of the dairy industry. If the dairy industry is entitled to protection under the customs tariff, then appropriate representations should be made to the government, because it is the government that decides these things. If it seems justified, no doubt a tariff will be put on; but the trend in recent years, as the committee knows, has been not to increase tariffs. I do not very often get much support, even if I were prepared to suggest it myself, for that policy. But nevertheless, that is a matter which comes primarily, I think, under the customs tariff. So far as I know we impose now no special excise taxes as such on any imported products. We have tariffs on a wide variety of them, but there are no special excise taxes on imported products. I would appeal to the committee to try and stick as closely as possible to the excise tax.


George Alexander Cruickshank: I would like to ask the
minister a question. Am I to understand that the dairy council has not asked the government for any excise tax on imported oil?


Douglas Charles Abbott: I do not recall that we had
any representation.


George Alexander Cruickshank: You have a very short
memory.
Mr. Abbot!: In relation to the tariff, there is a varying-I sent out for information as to the tariff. There are tariffs imposed at varying rates on imported vegetable oils, but perhaps it would be better for me to practise what I preach, and that I give that information on the customs tariff.


Edmund Davie Fulton: Mr. Chairman-


Joseph-Alfred Dion: Order. Before going any
further I should like to know if any other hon. member wants to comment on the point of order raised by the amendment of the hon. member for Moose Jaw.


Alphonse Fournier: Page Mr. Knowles.


Stanley Howard Knowles: When I get an invitation,
sir, from yourself, and from the Minister of Public Works, it is pretty hard to resist it.
The Minister of Finance suggested shortly after my colleague from Moose Jaw moved his amendment that your previous ruling, that on the amendment offered earlier today by the hon. member for Peace River, applied in this instance. As I recall, there were two aspects of the ruling you made an hour or so ago. In part that ruling dealt with the question as to whether or not an amendment in ways and means was in order if it proposed to substitute a tax in blanket form. The other aspect of your ruling had to do with the question as to whether or not a proposal for a tax that comes under income tax legislation was relevant when the matter of excise tax was before the committee.
I notice, sir, that you are nodding your head. I shall assume that I am correct that your ruling contained those two parts, and I shall now deal with them, in view of the fact that the Minister of Finance has suggested that the same ruling should apply to the present amendment.
With respect to the first part I think it is only fair that I be permitted to put on the record the fact that in recent times, to my knowledge, there have been four amendments of this type made in committee of ways and means. There may be others; but there are four, the records of which I have here.
On March 22, 1948, as recorded at page 2490 of Hansard, when the Excise Tax Act resolution was before us, I moved:
That clause 1 of the proposed resolution as amended and clauses 2, 3 and 4 be deleted therefrom, and that the following be substituted therefor:
"That it is expedient to introduce a measure to impose taxation upon excess profits to the extent necessary to maintain the balance of ways and means."
That amendment was allowed by the then deputy chairman, the present Senator Golding. Then, in 1949, as recorded at pages 1627 and 1628 of Hansard, an amendment was moved by my deskmate, the hon. member for Melfort, dealing with ice cream and similar commodities. That amendment was worded differently from the one in 1948. The 1949 amendment was ruled out of order by the deputy chairman, the hon. member for Vaudreuil-Soulanges. That ruling was the one that you, sir, as chairman of the present

committee, quoted an hour ago when you were dealing with the amendment moved by the hon. member for Peace River.
The next amendment in the series is the one I moved only a few days ago, on April 26 of this year, as recorded at page 2415 of Hansard. My amendment on that occasion was:
That clause 1 of the proposed resolution be deleted and that the following be substituted therefor:
"That it is expedient to introduce a measure to impose an additional tax on spirituous liquors to the extent necessary to maintain the balance of ways and means."
The parliamentary assistant to the Minister of Finance took objection to that amendment on the ground that it should have given a specific amount. But you, sir, being in the chair on that occasion, although you did say you would like to have had time to think it over to a greater extent, nevertheless expressed the opinion that it was in order and you put the question.
Of the three amendments I have just quoted, two were allowed. Those two were in precisely the same language, using the expression, "to the extent necessary to maintain the balance of ways and means." One of those three, namely the middle one, which was ruled out of order, was worded in language different from that of the two allowed. I ask you to note that the one that was disallowed was worded differently from the other two.
The fourth of the amendments in these series is the one moved this afternoon by the hon. member for Peace River. It was worded in the same way as the two that were allowed, namely the one I moved in 1948, which was allowed by Mr. Golding, and the one I moved last Thursday which was allowed by yourself.
You, sir, today chose to reverse your ruling of last week on the basis of the ruling of the deputy chairman on November 10, 1949. But in reversing your ruling you did say that what was wrong with it was that it did not set out a tax specific in amount.
I cannot quarrel with the ruling you made on the amendment of the hon. member for Peace River. I sought to do so, but I was stopped. My suggestion is, however, that the ruling you gave then laid down a point which has been met by my colleague from Moose Jaw. You said that what was wrong with the last amendment was that it did not set out a tax specific in amount. The hon. member for Moose Jaw has now presented an amendment which sets out the specific amount of $16 million, which is the amount which would be lost by dropping the tax on electric refrigerators, stoves and washing machines. Furthermore the amendment of the hon. member for
Excise Tax Act
Moose Jaw uses the key words which were held to be in order by Mr. Golding on March 22, 1948, and by yourself only last week, on April 26, 1951, namely the words, "to maintain the balance of ways and means."
I submit therefore that, with respect to the first aspect of the ruling you gave an hour ago, the point has been met and the amendment should be allowed. In this connection I think notice should be taken again of citation 500 in Beauchesne's third edition, which states:
Though it is the function of the committee of ways and means to impose rather than to repeal taxes, examples of the repeal of taxation effected in this committee are to be found upon the journals. Proposals for the variation or modification of taxation can therefore be made in the committee; but these proposals must be grafted upon the financial scheme submitted by the government, and must not affect the balance of ways and means voted for the service of the year. Amendments, therefore, can be proposed to substitute another tax, of equivalent amount, for that proposed by the government, as, for instance, a proposal to substitute probate and legacy duty on real property as an alternative for an inhabited house duty, the necessity of new taxation, to that extent, being already declared on behalf of the crown.
I think that at some point in our attempt to make an amendment based upon the right set out in that citation we should have the matter settled. If you have ruled that the kind of amendment moved by the hon. member for Peace River today is out of order because it does not set out a specific amount, you should therefore rule the present amendment in order because it does what you ask, and does what citation 500 says is in order, namely it proposes to substitute another tax of an equivalent amount for that proposed by the government.
The government proposal is for a tax on electric refrigerators, stoves and washing machines which the Minister of Finance says will raise $16 million. The hon. member for Moose Jaw asks that that tax be dropped, and that there be a tax on capital gains to the extent of $16 million to maintain the balance of ways and means.
I leave that first aspect of your ruling of an hour ago-although by this time, it may be an hour and a quarter ago-and come to the second aspect of it, namely, as to whether it is good practice on a resolution dealing with the Excise Tax Act to move an amendment that seeks to alter both the Excise Tax Act and the Income Tax Act. I take it that any tax on capital gains would have to be imposed under the Income Tax Act.
In this connection I am going to rely on another authority, this time the Minister of Finance (Mr. Abbott).

Excise Tax Act


Douglas Charles Abbott: He is not an authority on procedure. I yield the palm to you there.


Stanley Howard Knowles: The Minister of Finance has made statements on two occasions which I think are to the point at this time. Last evening when we were discussing procedure -we are spending a lot of time on that in this budget debate, and it could have been avoided so easily-I proposed that we deal with this present resolution in an orderly fashion and discuss it paragraph by paragraph even if we did not take a vote at the end of each paragraph. The Minister of Finance objected and said that the whole resolution was before us and as long as it was before us hon. members ought to be free to jump from a discussion of one tax to a discussion of another, or hon. members who were not here when one tax was up for discussion should be able when they came in to discuss a tax that had been discussed previously.
If the Minister of Finance takes that position I think he should be logical and the committee should be logical and realize that we have before us, not just the one resolution but the whole budget presented by the minister. When the minister finished his speech on the night of April 10 he did not present to the committee just one resolution, he presented several. He presented a resolution having to do with the Income Tax Act, one having to do with the Excise Tax Act-


Douglas Charles Abbott: Three.


Stanley Howard Knowles: And one having to do with the Customs Tariff. That makes three, and1 three is several, so we are all agreed. There are three resolutions before this committee of ways and means. Furthermore, my same authority, the Minister of Finance, when speaking in the house on the budget on the night of April 10, as reported on page 1812 of Hansard, said:
If hon. members have succeeded in following my estimates of additional tax yields they will realize that my proposals so far leave me about $100 million short of my necessary objective of $400 million to balance this year's budget. My range of choice to secure this remaining $100 million is really limited to more than doubling the increase I have already proposed in the personal income tax, which could only be achieved by a sharp lowering of exemption levels, or an increase in the sales tax.
I do not agree with the Minister of Finance when he says that he is limited to two alternatives. However, I ask you to note that the Minister of Finance suggested that the point was reached where he had to decide between two forms of taxation to achieve a balance. Something was said the other night by Mr. Speaker about private members having the

same rights as ministers. We were discussing another point of order at that time. I submit that, if the Minister of Finance has the right to survey the whole field1 of taxation and decide whether he is to raise the money that he is short by taxation under the Excise Tax Act or by taxation under the Income Tax Act, the committee has that same right.
We now have before us three proposals, but we are dealing in particular with two resolutions, one with regard to the Income Tax Act and one with regard to the Excise Tax Act. We should have the right to register our decision. The minister has decided to raise what he is short by an increase in the sales tax and in other excise taxes. We suggest that some of the money that the minister proposes to raise under the Excise Tax Act should not be raised in that manner but should be raised by means of a capital gains tax, even though that comes under the other resolution. As a matter of fact, if the resolutions had been taken up in committee of ways and means in the order in which the minister put them on the order paper we would have dealt first with the Income Tax Act resolution. However, the minister proposed that we deal with this resolution first, which was his privilege.
My point is that the whole of the minister's budgetary proposals are before us. If there is any validity in citation 500 in Beauchesne's third edition-a similar citation will be found at page 431 of Bourinot-if there is any substance in the right of the committee of ways and means to propose an alternative so long as the balance of ways and means is maintained, the committee should be able to exercise that right in the form set out in the amendment of the hon. member for Moose Jaw.
To recapitulate, because the hon. member for Moose Jaw asks for a tax which is an alternative to the one proposed by the government, he is in order under citation 500. He meets the provisions of citation 500 and he meets the requirement you added this afternoon by naming the specific amount of $16 million. He meets the requirement that the balance of ways and means be maintained; he says so right in his amendment. As to relevancy, I suggest, as I have just been arguing, that we have all the minister's budgetary proposals before us and we should have the right to move a substitute tax as is contended by the authorities on procedure.


Joseph-Alfred Dion: I thank the hon. member for his able remarks. The amendment moved by the hon. member for Moose Jaw reads:
That clause 4 of the proposed resolution be deleted and that the following be substituted therefor:

"That it is expedient to introduce a measure to impose taxation on capital gains to the extent of $16 million so as to maintain the balance of ways and means."
In my opinion this amendment represents no substantial change from the earlier amendment. It is true that the total amount to be raised is stated, but it is necessary to specify the rate of the tax to be imposed. Let me quote again my previous ruling: "This question was settled by a chairman's ruling on November 10, 1949, where it was made clear that the tax to be substituted must be specific and must clearly preserve the balance of ways and means". If the ruling were otherwise, the persons affected would not be aware of the rate of taxes to be applied to them. I think that my present ruling comes within the sense, if not the wording, of my earlier ruling. As a second ground, I rule that this amendment concerning a capital gains tax is not relevant to this Excise Tax Act resolution (see citation 344 of Beauchesne's third edition). The rule of relevancy in amendments applies in committee as in the house, and the amendment is out of order on this ground also.


Stanley Howard Knowles: I appeal from your ruling.
Mr. Speaker resumed the chair, and the chairman of the committee made the following report:


Wilbert Ross Thatcher: an amendment to clause 4 of the Excise Tax Act resolution as follows:
"That clause 4 of the proposed resolution be deleted and that the following be substituted therefor:
'That it is expedient to introduce a measure to impose taxation on capital gains to the extent of $16 million so as to maintain the balance of ways and means'."
The chairman ruled that the amendment was out out of order on the ground that the tax to be substituted was not sufficiently specific and was irrelevant to the excise tax resolution. From that decision Mr. Knowles and others appealed.


S0709-170 HOUSE OF COMMONS
[Stage Direction]
Excise Tax Act
And the house having resumed in committee of ways and means:
Some hon. Members:: Six o'clock.
At six o'clock the committee took recess.


[Stage Direction]
AFTER RECESS

The committee resumed at eight o'clock.
Mr. Nose worthy: Mr. Chairman, inasmuch as the Liberal majority in this chamber has decreed that we must take this omnibus excise tax resolution in toto rather than section by section, I And myself in the same position as other hon. members in the committee, namely, that I have no choice but to vote against the resolution in its entirety. I shall do that not because I am opposed to every section of the resolution but because I am so greatly opposed to certain sections, particularly paragraphs 1 and 4, that I cannot support the resolution. I was prepared to support a number of the amendments which you, Mr. Chairman, in your wisdom have decreed to be out of order; and I find that it would probably be difficult to move any amendment or to suggest any changes which will likely be acceptable.
I particularly want to deal with paragraph 1, that pertaining to the sales tax. I am opposed to the sales tax on fairly general principles; and I think those principles were stated very clearly by the executive council of the Canadian Chamber of Commerce in a letter forwarded to the Prime Minister on January 17 of this year. It is not always that I find myself in agreement with the chamber of commerce-
John Lambert Gibson: They must be wrong.


Joseph William Noseworthy: -but in this particular I am. As to the sales tax, they say they are opposed to it on the ground that:
. . . indirect taxes are hidden taxes and as such are not conducive to public tax-consciousness and hence lead to indifference rather than careful scrutiny of government expenditures.
I think that is one fairly good ground on which to oppose the sales tax and, certainly, the increase in the sales tax which has been proposed in the budget.
I am opposed to the sales tax because I fail to see how that tax can have any other effect upon the cost of living than to increase it. I cannot see how that tax can be increased without, at the same time, adding further to the increased cost of living. Certainly with the cost of living rising, as indicated in the statement this afternoon by the Minister of Trade and Commerce, I suggest that we in

this parliament should be taking measures to halt or to reduce that cost rather than measures which, I think we must all admit, can do nothing more than raise that cost still higher.
To the extent that this increased sales tax raises the cost of living, it will give to workers across this country an added incentive to ask for increases in pay and we shall have that deadly spiral continuing. We shall be going on from one increase to another. To the extent that this tax raises the cost of living, it will also raise the cost of government. It will raise the cost price of those things that the government itself must purchase, and that increased cost will be felt in government at every level. It will be felt in increased cost of government at the federal, the provincial and the municipal level. Every municipal council across this country will find itself obliged to increase its mill rate because of this rising cost of living, to which the tax we have proposed in this present resolution will be a contributing factor.
I think economists are agreed that a hidden sales tax has the effect of retarding business. So far as it retards business, the government will lose in other forms of taxation possibly more than it will gain from an increase in the sales tax. I do not know just what consideration the minister has given to the extent to which an increased sales tax will retard business activity; but economists everywhere are agreed that that is the effect of a sales tax upon business. One hundred United States economists, in a signed statement to a former president of the United States, had this to say:
A sales tax reduces real wages, diminishes purchasing power, and puts a brake on industrial and business activity.
I submit that this is no time for us to consider the application of measures which will reduce real wages and diminish purchasing power of our people, and put a brake on industrial and business development. We have heard a great deal in this house, and particularly from members of the cabinet, concerning the need for increased production. We have heard a great deal to the effect that if we are to stabilize the rising cost of living, if we are to check it, we must do so by increased production. I submit that the increase in the sales tax will retard rather than increase production. It will have the effect of retarding production at a time when production is very essential.
A sales tax adversely affects the small businessman in contrast with larger business concerns. Here again we must agree that

larger concerns carrying a much greater variety of goods and at varying high and low prices are in a much better position to pass the tax on in the aggregate than is a small business. The tax favours big business, as do many other measures introduced by this government, and as do many other policies being followed by this government. I shall have more to say on that point later.
A sales tax again bears hardest on the poor, and those less able to bear that tax. Even with no sales tax on most of the essential foods, on certain building materials, and with other exemptions, the poor man who today has to clothe and house a family will find his tax bearing more heavily upon him than will the wealthy bachelor who has no one to clothe or to house but himself.
While certain essential articles are exempt from the sales tax, nevertheless many of the ingredients that are used in some of these finished products which are exempt are themselves taxed, and indirectly the sales tas has an effect upon the price of many of the articles that are supposed to be exempt from the tax.
Clothing, household furniture, children's clothes and shoes, are just about as essential in a country with our climate as is food. It is just as essential to keep a pair of shoes on a child's feet in this country as it is to keep a roof over that child's head. In taxing that clothing and many of the articles that are required in a home, the government is making it more difficult-more difficult than is necessary-for those who are attempting to keep homes together and to raise families in this country to do so.
Mr. John H. Gray, former president of the American Economic Association, has this to say regarding sales tax:
The sales tax is one more attempt to put the burden of taxes on the poor. It violates every canon of taxation accepted in the civilized world for 150 years.
It is a little surprising to find a Liberal government increasing the sales tax by 25 per cent. So far as I know the two other outstanding countries, except Canada, in the world today, that can boast of a 10 per cent sales tax are Russia and Spain. There is in both of these countries a 10 per cent sales tax. The Liberal government is certainly putting Canada in good company when it puts us in a class with either of those countries. As a matter of fact if the Liberals of this government-if there are any Liberals left in the government-were loyal or true to the professed principles of Liberalism they would have wiped out the sales tax altogether 80709-170i
Excise Tax Act
instead of seeking now to increase it. The one party that down through the years of Canadian history has most steadfastly opposed the imposition of sales tax has been the Liberal party. If you follow the history of the sales tax in other countries you will find that in every country and in every age it has been those governments that were farthest removed from the common people and who were most reactionary in their policies that have led the world in the imposition of the sales tax, led the way that this government is following at the present time.
Ways and means have been suggested to the minister from this side of the house whereby the sales tax, as referred to in clause 1, and the tax referred to in clause 4, could be avoided or alternative means of providing the necessary funds be found. The government has steadfastly refused to accept any of those suggestions. They will, in their steamroller style, force this Excise Tax Act through parliament. I do not doubt for a moment that, regardless of what the people of this country may think, those who sit on the Liberal benches will follow the direction of government ministers and vote to support this act.
If hon. members were duly concerned with the critical situation in which the country finds itself today, and gave recognition to the one control which parliament exercises over government, this government would not get a grant of even one dollar from parliament until some satisfactory steps were taken to curb the rising cost of living, instead of adopting measures that can only further increase that cost. If those sitting on the Liberal benches would consider, instead of government policy, the express wishes of the majority of the people in this country, they would line up with the opposition groups and refuse to grant one dollar to the government until steps are taken to check the rising cost of living.


Stanley Howard Knowles: I should like to ask a question about paragraph 5 which deals with the excise tax on cigarette papers and cigarette paper tubes, something about which I do not know as much as perhaps some other hon. members. Representations have been made to me by small grocers concerning the position in which they are left owing to the fact that they had on hand, as of April 10, stocks of these papers on which they had paid the tax.
As the minister knows, when the tax did apply to these cigarette papers the amount of that tax was more than the cost of the papers. It has been represented to me by small grocers that the mark-up on these papers was very slight and the profit very

Excise Tax Act
small, and that they are left in a most unfavourable position so far as their stock of cigarette papers is concerned.
By virtue of the minister's announcement on April 10 there can be no refunds in connection with stocks on hand. How long has the practice obtained that was reflected in that announcement? In addition to any formal answer the minister might make, would he add something that shows he appreciates-as I urge him to appreciate it- the position in which these small grocers are placed.


Douglas Charles Abbott: I am aware of the situation.
The practice of granting no refunds is one which has existed for many years, virtually from the beginning of the imposition of these taxes. Information which has been reaching me is that in fact the retailers are working off their stocks at the old price, and that they have not reduced the price. Then of course there is some compensating advantage in the fact that their inventories of tobacco would have been tax-paid at the lower price. So that if they followed the usual and legitimate practice of charging for inventory on hand the tax-paid price, thereby providing for possible future reductions in taxes when they would have stocks on hand at the higher prices, as was the case here in connection with cigarette tubes, then I think it is unlikely that there is any real hardship involved in the situation to which my hon. friend referred. I have had complaints that retailers are not reducing the prices on cigarette papers and tubes-and they are not obliged to do so.


Stanley Howard Knowles: Representations made to me indicate real hardship. The amount involved is not great, perhaps, but when one considers the case of the small corner grocery store one must realize that it is not a big business. Any loss he has to take is a loss indeed. It seems to me from the position taken by the minister that if he denies to these people the right to get any refund, as he has just said, he is encouraging them to charge for taxes on stocks on hand in cases where they have not paid the taxes. We have complained about that; but the minister puts peqple in that position when he says to them, "That is what you have to do in order to make up for your other loss." Surely there is a better way.


Douglas Charles Abbott: That has been the practice for a great many years, as most members of the committee are aware. The question of making refunds, when there are reductions in taxes on stocks in the hands of retailers, is completely impracticable and would leave the door open to grievous kinds of abuses.

In the eight or nine years I have been connected with the department and, I am told, long before that, the practice I announced in the budget, namely that there would be no refund on the cost of tax-paid goods, has been followed.


Mrs. Fairclough:: I know for a fact that that has been the practice, but it works a great hardship on people who have goods in transit at the time the tax is lowered. Many times when goods are shipped by freight they are delivered as much as a month after the date of the lowering or the repeal of the tax. Those people must pay the tax, and then they are forced to absorb it. In some cases it involves large amounts.


Douglas Charles Abbott: That is really a slow freight, if it takes a month.


Ellen Louks Fairclough: I am sure the minister
remembers in particular the case of sugar.


Mr. Quelch:: Would the minister explain in detail just what are the taxes on a package of cigarettes? I understand that on a package of twenty cigarettes the price of which is forty cents, around twenty-eight cents is taxation.


Douglas Charles Abbott: The federal tax is now twenty-three cents on a package of twenty cigarettes, plus sales tax.


Hazen Robert Argue: The second paragraph states that there shall be an excise tax on goods mentioned in schedule I of the act, and on furs. What type of furs does this include? Is it all furs, or furs in the raw or finished state?


Douglas Charles Abbott: Dressed and dyed furs.


Hazen Robert Argue: I am not objecting to a tax on some furs, but I think in a country like Canada, where we have temperatures down to forty degrees below zero, a fur coat for a lady is certainly not a luxury. The tax should not be placed on those furs which ordinarily go into the making of one of the cheaper coats. Would the tax apply to the lambskins or sheepskins which go into the production of mouton?


Douglas Charles Abbott: I am not an expert in furs, but I am informed it is not applied on sheepskin shearlings, whatever that may be; but it is on other dressed and dyed furs. I remember two or three years ago we had a sharp discussion as to whether a fur coat in a climate such as we have was a luxury. I was quite prepared to consider that it was not.


Mr. Fair:: I believe the sheepskin shearlings would be the taxes the minister is going to collect from the taxpayers when this budget is passed. The Minister of National

Revenue will look after gathering up the fleeces. It does not matter whether people have even their shorts on, as was suggested a few nights ago by the hon. member for Macleod, the Minister of National Revenue will get his pound of flesh anyway.


Douglas Charles Abbott: The Secretary of State for External Affairs suggests that it might be described as the golden fleece.


Robert Fair: I was going to ask the Minister of Finance whether there are any taxes in addition to the 23 cents that he intends to collect, plus the sales tax. Are there any provincial or other taxes levied on raw tobacco that are not included?


Douglas Charles Abbott: I understand that there are in some provinces. I am not too conversant with the provinces other than my own province of Quebec, but I do know that in Quebec there are additional taxes.


Victor Quelch: The 23 cents is before the minister's tax is applied?


Douglas Charles Abbott: No, that includes the additional tax here.


Mr. Shaw:: Mr. Chairman, when speaking earlier this week on this Excise Tax Act amendment I expressed my unalterable opposition to clause 1. In doing that I was expressing also the unalterable opposition of my colleagues. During the past several days we have made a number of efforts designed to effect a change in this proposed amendment but up to the present time we have not been able to do that nor has the minister, on the other hand, been able to convince us that the revenue which he anticipates from clause 1 of this proposed amendment is justified in the light of the fact that undoubtedly he will have a surplus substantially above the amount which this tax will bring in.


Douglas Charles Abbott: Prophecy is still a very gratuitous form of error.


Frederick Davis Shaw: That is quite possible. Therefore I am going to move one more amendment. I assure you that there is ample precedent for moving an amendment of this character. I suggest that rather than spend a long period of time debating and discussing a point of order we should vote on this amendment. I move:
That clause 1 of the proposed amendment to the Excise Tax Act be deleted and that the remaining clauses be renumbered accordingly.


Douglas Charles Abbott: Mr. Chairman, as a matter of convenience I would be delighted to accede to my hon. friend's suggestion and get the vote, but I would not want it to be held as a precedent against me or against any other minister of finance in future years. I think
Excise Tax Act
I must take the same point of order that I have had to take on similar occasions over a period of some years and say that this unquestionably affects the balance of ways and means and consequently is out of order.


Stanley Howard Knowles: It could be that I might be getting a little tired of this myself.


Douglas Charles Abbott: You have nothing on us.


Stanley Howard Knowles: Mr. Chairman, I have to get organized a bit, but I am not taken completely at a loss by this amendment because I had thought earlier in the game that an amendment in the terms moved by the hon, member for Red Deer was one that should be moved, and I considered doing so. Hence I am glad that it has been moved.
As a matter of fact, last Thursday, after we hadi had our little battle over whether or not this resolution could be divided, an hon. member from the other side of the house met me in the hall at suppertime and asked me, "What are you fellows kicking about, why don't you move an amendment to delete any clauses you object to?" My reply was, "I tried that once a few years ago but was ruled out of order". I hope the chairman did not hear that.


Douglas Charles Abbott: It has been done more than once.


Alphonse Fournier: You did not invent that.


Stanley Howard Knowles: Nevertheless, I have since done some more research to see whether the ruling against me of a few years ago was in keeping with all the precedents in connection with this matter. As late as this morning I was still working on it. Going from Beauchesne to May I found citations which had footnotes that took me to certain volumes of the British Hansard. They are difficult to find at times. You go into the library and get an attendant to take you into one of those cubbyholes and if you do not want to go too far back you may find the volume. But if the volume is not there he has to take you out of the library and over to a vault underneath the Senate, of all places.
At any rate this morning I found in the British Hansard for 1909 the record of an. incident which was quite a surprise to me. The hon. member for Red Deer says that that was the year in which he was bom so it is quite appropriate to refer to this 1909 Hansard in support of his amendment. I am quite sure, Mr. Chairman, that you will not mind my making the comment that to you this must seem like quite a recent precedent in view of the fact that last night you took us back to 1770.

Excise Tax Act
I discovered in this 1909 British Hansard something that was quite a surprise to me in that it records one precedent which supports the position the Minister of Finance has taken, namely, that his resolution should be considered in its entirety.


Douglas Charles Abbott: Justified at last.


Stanley Howard Knowles: I am glad to hear the minister welcoming my reference to this precedent and I hope he will be logical and continue to welcome the later chapter in the account that I shall give.


Douglas Charles Abbott: I may want to divide your precedent.


Stanley Howard Knowles: This took place on May 10, 1909, when Mr. Lloyd George was Prime Minister of the United Kingdom.


Douglas Charles Abbott: Mr. Asquith.


Stanley Howard Knowles: I'm sorry; Mr. Lloyd George was chancellor of the exchequer. The financial critic appeared to be Mr. Austen Chamberlain. On May 10, 1909, as reported in the British Hansard starting at page 1463, Mr. Lloyd George introduced into the committee of ways and means a lengthy resolution having to do with various taxes on liquor at different stages. This resolution was quite complicated and it filled two full pages of the British Hansard.
After he had moved the resolution in committee the chairman apparently put it to the committee in its entirety and Mr. Austen Chamberlain objected. Mr. Austen Chamberlain suggested that it was a most complicated resolution containing table A, table B, table C, and then a breakdown of table C into two sections which were headed by Roman numerals, which in turn were broken down into sections headed by Arabic numerals and so on down the line. Mr. Austen Chamberlain took the view-


Douglas Charles Abbott: No commas or periods?


Stanley Howard Knowles: It was full of commas and periods.


An hon. Member:: All in the right place.


Stanley Howard Knowles: One of your colleagues has a mortgage on commas. As I say, Mr. Austen Chamberlain took the view that as it was so complicated it should be discussed seriatim. Mr. Lloyd George then said:
May I submit to you, sir, that this resolution is purely a formal stage, with the view to authorizing me to introduce the finance bill, and that therefore I submit that it is proper that the whole of the licences should be included in one resolution, seeing that it is a formal stage to enable me to introduce the bill for licences in general.
Whereupon the chairman, Mr. Emmott, ruled on the point that had been raised by

the member for East Worcestershire, Mr. Austen Chamberlain. The chairman said:
It is quite true, as the right hon. member for East Worcestershire has said, that the time which I have occupied in reading this resolution has been quite an unusual draft on the time of the committee, but with regard to the question put to me as to the form of this resolution, my reply is that the resolution is such that I must take it as it is. I cannot say how far there is a precedent for a resolution of this length, but having regard to the fact that it deals entirely with licences for excise-able liquors, I cannot undertake to alter it.
Mr. Austen Chamberlain had some more to say despite the ruling of the chairman that he had no alternative but to accept it. A little later, however, Sir F. Banbury intervened and said:
I wish to raise a point of an important character. Would it be in order to move that the resolution be divided into two?


Joseph-Alfred Dion: It would be in order to do so by amendment of course to the resolution, which would have the effect of dividing it into two parts.


Sir  F. Banbury@: I beg to move that the resolution be divided into two parts.


Joseph-Alfred Dion: The hon. baronet has misinterpreted' my meaning. I said that the hon. baronet might move an amendment which would have the effect of dividing the resolution into two parts . . .
In other words, he could not just move that it be divided into two parts. He had to move a resolution that had that effect. Whereupon another member of the opposition, Mr. James Hope, made a motion. He said:
I propose to leave out the words "and sale" from the first paragraph headed "Excise liquor licences." That would have the effect of confining the discussions to the manufacturers licences.
If you turn back to the first line of the resolution you will find that it referred to taxes or licences for the manufacture and sale of intoxicating liquor, but by deleting the two words "and sale" all of the taxes in that resolution that referred to the sale of liquor would be removed, and the only taxes left were the taxes relating to the manufacture of liquor. The chairman accepted the motion as in order. It was debated at length and eventually was voted on at pages 1474 and 1475. The amendment was defeated, but my point is that the situation is on all fours with what we have here in the house now. The chancellor of the exchequer, like our Minister of Finance, insisted on the resolution being treated as one resolution. The chairman agreed with the chancellor of the exchequer but thereafter-


Douglas Charles Abbott: Pretty sound.


Stanley Howard Knowles: The Minister of Finance says "pretty sound". If the chairman, Mr. Emmott, was sound on one point he was sound all the way through.


Douglas Charles Abbott: That does not necessarily follow.


Stanley Howard Knowles: Having taken that position, when a member then asked for the right to move an amendment to that one resolution, which had the effect of deleting a large section of the taxation proposed by the resolution, the chairman allowed that amendment as in order. Please note there was no suggestion of any substitution of another tax. That does not come into the picture at all. The right to move simply the deletion of a portion of the resolution thereby deleting part of the tax was recognized by the chairman and, as I say, it was put to a vote.
The next day, as found at page 1737 of the same volume of the British Hansard, the point came up again. I will not read it all this time.


Douglas Charles Abbott: Oh, go ahead.


Stanley Howard Knowles: There was another motion-


An hon. Member:: You are out of order.


The Deputy Chairman:: Order.


Stanley Howard Knowles: -in committee of ways and means. It had to do with land value taxation. Again it was a complicated motion, but it was not nearly as complicated as the one of the day before. It only had three sections, and on this occasion a member by the name of Captain Craig raised a point of order as to whether it had to be taken in its entirety or whether it could be divided. The chairman made the same ruling as he had made the day before-


Douglas Charles Abbott: Sound again.


Stanley Howard Knowles: -that it was one resolution. But then Mr. James Hope, the same fellow who raised the question the day before, said:
I want to know whether it would be competent for an hon. member to move an amendment in the second line to leave out "duties" and insert "duty."
The result again was to cut the taxation effect of the resolution in half. The member went on to say:
It would then, of course, be competent for the government to bring up a second resolution . . .
And so on. The chairman said:
As far as I can see that would certainly be in order if the hon. member moved such an amendment.
I thought I heard the Minister of Finance say "sound again", or was it a voice which came from this side of the house?


Douglas Charles Abbott: People can be right on one
thing and wrong on others, you know.


Stanley Howard Knowles: Mr. Chairman, I submit
that there was more justification for the position taken in the British house than there is for the position taken here because the case
Excise Tax Act
on May 10 was a resolution, while complicated in form, dealing wholly with liquor, and the case on May 11, while complicated in form, dealt wholly with taxes on land values. Nevertheless the ruling was made that the resolution in each case had to be taken in its entirety, but along with that ruling was the ruling that members had the right to move for the deletion of a portion of the tax imposed by those composite or complicated resolutions. Therefore I submit-


Mr. Sinnoii:: You are out of order.


Stanley Howard Knowles: -that we should have a little change in the monotony of these rulings against our amendments-


John Sylvester Aloysius Sinnott: Sit down. You are out of
order.


Louis-René Beaudoin: Order.


Stanley Howard Knowles: -and that the amendment of the hon. member for Red Deer should be allowed. It is a very simple one and, as a Liberal member said to me in the hall at suppertime last Thursday, it gives us a chance to vote on the question in a very simple way. Surely the British precedent if it is good in the first instance is good in the second case as well.


Douglas Charles Abbott: We must leave this to you,


Mr.   Chairman.Mr. Drew@: Mr. Chairman, just before you make a ruling on this point, I want to say that we have had so many amendments moved on different grounds that I should imagine it would be an extremely difficult thing to have clearly established what the pattern is that members of the house themselves have created out of these various rulings. It has, however, been apparent that there has been a clear desire on the part of some hon. members to have these items dealt with in such a way that this first item can be voted on. The decisions which have already been made would suggest that your likely decision now will be that this amendment is out of order.


Stanley Howard Knowles: No, no.


George Alexander Drew: I am afraid I must draw that as a likely conclusion, but whether or not that is so I propose if a vote is called in this case to vote in support in effect of the request that this tax be deleted because that is what we have been pressing for. If the vote means nothing more, I hope our vote will be taken as once again expressing our desire that this tax should be deleted.


An hon. Member:: You are frustrated.

Excise Tax Act


Louis-René Beaudoin: I should like to thank all hon. members who have participated in the debate on this very important point of order. The hon. member for Winnipeg North Centre particularly has studied the matter very carefully, and he has given us a lengthy interpretation of what he believes to be the correct procedure to follow. He agrees entirely in what he has quoted with the ruling that I gave the committee yesterday except for the last part where he finds that in the British house an hon. member was allowed to have a complicated question divided on a motion by deleting a portion of that question. We are agreed all along the line except on that one point. If the hon. member will look at citation 500 of Beauchesne, third edition, he will see why it would be very difficult for the chairman in the Canadian house at least to agree with him that a complicated question can be divided by a member moving that a certain portion of the resolution be deleted. Citation 500 says very clearly that it must not affect the balance of ways and means. Certainly the hon. member will admit that if this amendment should carry, deleting the first paragraph which provides that the rate of the general sales tax shall be increased from eight per cent to ten per cent, the balance of ways and means would be altered. Therefore I would have no alternative but to declare the amendment out of order.
On the other hand, the leader of the opposition has indicated that this discussion has revealed that hon. members generally would like to express their opinion on this particular paragraph. I have not the citation under my hand, but I am quite sure there is a citation in Beauchesne, third edition, stating that by unanimous consent the committee may set aside the rule. Should there be unanimous consent we could put the amendment and permit hon. members to express their opinions on this paragraph. I am in the hands of the committee; therefore I ask whether unanimous consent is given so that this vote may be taken.


Douglas Charles Abbott: I have already indicated, Mr. Chairman, that in accordance with the well established rules of the house I shall welcome a vote on the sales tax question when the appropriate section of the Excise Tax Act is before the house. Under existing circumstances that is the only time I would be prepared to give unanimous consent to have the vote taken.


Louis-René Beaudoin: In the circumstances, then, I must regretfully declare the

amendment out of order, for the reasons I	
have already given.


Frederick Davis Shaw: I very much regret that under the circumstances I shall have to appeal your	
ruling.	
Mr. Speaker resumed the chair, and the chairman of the committee made the follow-	
ing report:	
A motion by Mr. Shaw was ruled out of order, on	
the ground that it was	not in order to move the
deletion of a particular	clause in an excise tax
resolution because it alters the balance of ways	
and means.	
Mr. Speaker put the question as follows:	
Mr. Beaudoin of the	committee of ways and
means reports that Mr. Shaw moved an amendment to a resolution which was being considered by the committee. The chairman ruled that the amendment was out of order because it was not in order	
to move the deletion of	a particular clause in an
excise tax resolution because it altered the balance of ways and means. From that ruling there was an	
appeal by Mr. Shaw and	others.
The house divided	on the question: Shall
the ruling of the chairman be confirmed? And the ruling was confirmed on the following	
division:	
YEAS	
Messrs:	
Abbott	Gardiner
Anderson	Garson
Applewhaite	Gauthier (Sudbury)
Arsenault	Gibson
Ashbourne	Goode
Bater	Gosselin
Benidickson	Gour (Russell)
Bennett	Gregg
Blanchette	Harris (Grey-Bruce)
Blue	Harrison
Boisvert	Helme
Boivin	Henderson
Bonnier	Henry
Boucher	Hetland
Bradley	Howe
Breithaupt	Hunter
Breton	Kent
Brown (Essex West)	Kirk (Antigonish-
Bruneau	Guysborough)
Byrne	Kirk (Digby-Yarmouth)
Cameron	Lafontaine
Campney	Laing
Cannon	Langlois (Gaspe)
Carroll	Lapointe
Carter	Larson
Cauchon	Lefrancois
Cavers-	Leger
Claxton	Lesage
Cleaver	Macdonald (Edmonton
Cloutier	East)
Conacher	MacKenzie
Cote (Verdun-La Salle)	MacLean (Cape Breton
Croll	North and Victoria)
Cruickshank	MacNaught
Darroch	McCubbin
Dewar	McCulloch
Dickey	Mcllraith
Dumas	Mclvor
Follwell	McLean (Huron-Perth)
Fournier (Hull)	McMillan
Fournier (Maisonneuve-	MeWilliam
Rosemont)	Martin
Fulford	Mayhew

Monette	Smith (Moose Mountain)
Mott	Stewart (Yorkton)
Murray (Oxford)	Stick
Mutch	Stuart (Charlotte)
Pearson.'	Studer
Proudfoot	Tremblay
Prudham	Valois
Ratelle	Viau
Richard (Gloucester)	Ward
Rinfret	Warren
Roberge	Weir
Rooney	Welbourn
Ross (Hamilton East)	Whiteside
St. Laurent	Winkler
Sinnott	Wood-112.
 NAYS Messrs:
Adamson	Herridge
Argue	Higgins
Balcer	Johnston
Beyerstein	Jones
Black (Cumberland)	Knight
Blackmore	Knowles
Blair	Lennard
Brooks	Low
Bryce	Macdonnell (Greenwood)
Casselman	Maclnnis
Catherwood *	McGregor
Coyle	McLure
Drew	Noseworthy
Fair	Pearkes
Fairclough, Mrs.	Quelch
Fleming	Ross (Souris)
Fulton	Shaw
Gillis	Tustin
Green	White (Hastings-
Hansell	Peterborough)
Harkness	White (Middlesex East)
Harris (Danforth)	Wright
Hatfield Hees	Wylie-46.
During the taking of the vote:


Edmund Davie Fulton: Mr. Speaker, I rise on a question of privilege to direct your attention-


Some hon. Members:: Sit down.


Mr. Speaker:: Order. If the hon. member is rising on a point of order or on a question of privilege, he must wait until the vote is concluded.


Edmund Davie Fulton: A question of privilege can be raised during the division.


Mr. Speaker:: No.
After the taking of the vote, and the Clerk proceeding to announce the result of the
vote:


Edmund Davie Fulton: Mr. Speaker, I rise on a question of privilege. I wish to direct your attention to the fact-


Mr. Boivin:: Wait until the vote is recorded1.


Mr. Speaker:: Order. I will hear the hon. member now.


Edmund Davie Fulton: I wish to direct Your Honour's attention to the fact that an hon. member, namely, the Minister of National Health and
Excise Tax Act
Welfare (Mr. Martin), was not in his seat in the house when Your Honour put the question, but entered the house after Your Honour had put the question, and voted with the yeas, which under our rules is not permitted). Under citation-


An hon. Member:: Small potatoes.


Edmund Davie Fulton: Furthermore, another hon. member, the hon. member for Springfield (Mr. Sinnott), left his seat after Your Honour put the question and while the vote was in process of being taken. I wish simply to refer to an earlier remark of Your Honour's. I think I should point out that my understanding is that a question of privilege may be raised during the course of a vote, but not a point of order. I would direct Your Honour's attention to citation 84 in Beauchesne, second edition, which reads as follows:
The Speaker, when his attention has been called to a breach of order in the course of a division has directed that the division should proceed, and has dealt with the matter when the division was completed.
I believe there is a citation in Beauchesne, third edition, to the effect that a question of privilege can be raised during the course of a vote. It was in order that I might raise it in time before the result was announced that I rose earlier.


Mr. Speaker:: Order.


Mr. Martin:: May I just rise not to answer the question of privilege but to make a comment to assist Your Honour in arriving at what I know will be an acceptable decision, even to the hon. gentleman. I was in the house. I was in the act of discussing a question with the hon. member for Spadina (Mr. Croll), trying to persuade him about a point on another matter altogether. I moved from his seat to my own and voted-I hope I voted correctly.


Mr. Croll:: I only want to confirm what the minister has said-and I was persuaded.


Mr. Speaker:: Order. First, with regard to the question raised by the hon. member for Kamloops (Mr. Fulton), I might say that 1 shall be glad to receive any representations which he may make to me in the house or privately regarding when a point of order or a question of privilege which has been raised during a division should be considered. I have allowed him to state his question of privilege before the vote was announced. I think at least that is proper procedure. I shall take into consideration whether I should have allowed him to continue with his question of privilege, during the division.
He has referred to the fact that an hon member was not in the house when the question was put. The hon. member says that he

Excise Tax Act
was in the house when the question was put. We accept his word for that. However, I should point out that according to standing order No. 12 it is irregular for an hon. member to move from one place to another or to leave the chamber while a vote is being taken or before the vote is announced. May I say that from time to time I have noticed lately that a number of members have moved from their seats during the voting. The occurrence tonight was by no means the first time that it has taken place. I know all members of the house would appreciate it if hon. members would be in their own seats during the vote and would remain in their seats until the result of the vote is announced.


Some hon. Members:: Hear, hear.
And the result of the vote having been announced, the house resumed in committee:


Louis-René Beaudoin: The Excise Tax Act resolution; is the house ready for the question?


Robert Fair: First of all, I want to sympathize with His Honour the Speaker. I notice that he has quite a hoarse voice from disposing of the appeals that have been made against the rulings of the chairman. I feel satisfied that a number of the appeals that have been made would not be made if hon. members had a chance to express their opinion, or had the minister not brought in the iniquitous taxes contained in the resolution.
We have heard many times that Canada is supposed to be a Christian country. I am wondering whether Satan is not in control of the Minister of Finance, his advisers in particular, and those who are supporting him even in the votes here tonight and this afternoon. In this country we have many young men and young women who are working hard and honestly, trying to pay their way, pay their debts, and provide a decent standard of living for themselves and their families. We are told that the taxes are being levied at the present time for the purpose of guarding ourselves against the effects of communism. I am wondering whether the taxes that are to be levied, if the resolutions that are before us are passed, will not help to build up the communist organization in Canada. I have thought about that time after time during the past few days; in fact during the past week, I have thought about rising in my place several times and expressing this opinion. But we do not find any relief from the taxes. We are not even given a chance to vote on individual taxes as they are proposed by the Minister of Finance. I am not satisfied;

people throughout the country are not satisfied. And while we are in grave danger, tonight's issue of the Journal gives this warning:
Emergency Keys Drive for Services Darkening World Situation Makes Action Urgent
This is an article by James McCook, which begins in this way:
Confronted with a darkening world situation, the Canadian government is to start a program to get more men in the forces that will stop just short of conscription.
Then I would comment here that during the early part of the session those of us who were worrying about Canada's safety suggested that something be done to make preparations for what might ultimately come. The government took the stand at that time that it did not feel that was advisable. Apparently however that will soon be changed and, according to this article, the time is close at hand. It goes on to say:
Defence Minister Claxton will make what government sources termed an "important" statement in the Commons, probably tomorrow night.
He will emphasize the need for more men at once.
"When There Is Need."
He will set forth the important role of the reserve army, whose members can be called to active service when the country needs them.


Louis-René Beaudoin: Order. May I ask the hon. member if what he is quoting has any relation to the Excise Tax Act resolution?


Robert Fair: I feel it is related very closely- in fact it is a sister of the resolution under discussion. This resolution is to provide money to protect us against communism. The heading I have read indicates that we are to make preparations for the building up of an army.


Douglas Charles Abbott: There is a slight flaw in my hon. friend's logic.


Robert Fair: And it will be some of the money raised under the resolution that will be used.


Douglas Charles Abbott: Mr. Chairman, I think I should say a word. If that view were accepted we would be making a joke of the discussion in committee of ways and means. My hon. friend may talk as much as he likes, but he knows as well as I do that the main purpose of consideration of a resolution of this kind in the committee of ways and means is that of obtaining information from the government as to the probable extent and nature of the tax.
The hon. member is a member of long experience in the house, and he knows that as well as I do. To discuss the armed forces under this resolution is I think completely absurd.


Louis-René Beaudoin: I am inclined to agree with the views expressed by the minister. I think the hon. member should direct his remarks to the resolution under consideration.


Robert Fair: If this is offensive to the Minister of Finance-


Douglas Charles Abbott: No, go ahead. I just asked the hon. member to observe the rules, that is all.


Robert Fair: I have read the effective part I wanted to read.


An hon. Member:: We can read.


Robert Fair: I do not have to read my speeches. I can make them without reading.


An hon. Member:: Order.


Robert Fair: And if those silent partners who are sitting opposite me in the Liberal benches want to get up and make a speech, and tell us what they think about this tax, I shall be very glad to sit down, keep quiet and let them express their opinions about it.


Some hon. Members:: Hear, hear.


Robert Fair: But when I am speaking I want them to keep quiet, as they have done throughout the session on this and many other important matters, up to the present time.


An hon. Member:: Silence is golden.


Robert Fair: I know that before these taxes were levied many of our most honest citizens were not able to earn enough money to give them a decent standard of living. When these taxes are levied, what will be the result? As I said a while ago, the government wants to get more men to join the army. While people are being treated like this, and every encouragement is given by government policy to an adherence to communism, I feel that to cut down the standard of living of our workers is working against the best interests of the country.
I do not know whether I should say more.


Some hon. Members:: Go ahead.


Robert Fair: Some say "go ahead." I am
protesting in particular against this 25 per cent increase in the sales tax. When I first entered politics in 1935 I remember clearly the Liberal candidate going around the country and bawling out the Conservatives for having introduced a 6 per cent sales tax. But one of the first things the Liberal government did in 1936 was to increase that tax by 33$ per cent. We have had that 8 per cent tax ever since, along with many other taxes including an increased income
Excise Tax Act
tax, which I am not allowed to talk about at the present time. Perhaps there will be another occasion later when I can say something about that.
In the present budget the sales tax is jumped another 25 per cent, up to 10 per cent. Yet the government wants the cooperation of all the people of Canada-this wonderful party on the government's side which came into office with 47 per cent of the votes of the Canadian people.


An hon. Member:: Forty-nine per cent.


Robert Fair: They are going to tax us still
further. But the people apparently like taxation because some of them were foolish enough when they had the chance only a couple of years ago to continue to support these taxation measures.


An hon. Member:: Fifty-four per cent
according to the last Gallup poll.


Robert Fair: Would the silent partner keep
quiet, please.


An hon. Member:: You can't take it, eh?


Robert Fair: I can take it, and I can give it, too. This is an indication of the idea of some of the supporters of the government: When I left here at six o'clock I walked along the corridor with a Liberal member who suggested that this appealing against the chairman's ruling was all foolishness- "What have we a chairman for, anyway? We should abide by his ruling." I disagreed with him, entirely. While I have great respect for the Chairman, for Mr. Speaker and for Mr. Deputy Speaker, I still say they are not infallible. I have every respect for the three gentlemen to whom I have referred, but I do not think we should always bow to their rulings. If we do not have the opportunity to express ourselves otherwise then we have to take the only course left open to us.


John Lambert Gibson: Hara-kiri.


Robert Fair: I do not know who that was
who spoke about his relatives' methods of doing things, but I am not suggesting anything as drastic as that. However, I would like to have some of these taxes taken care of, particularly the 25 per cent increase in the sales tax, and the increase in the excise tax on many of the items mentioned here in recent days.
I feel the tax on refrigerators, washing machines, electric and gas stoves should not be left on at this time. I would feel strongly, too, that the additional excise tax being imposed in connection with motorcars is not a proper one because, as has been pointed

Excise Tax Act
out before, cars are a necessity for a number of our workers who live in the suburbs of the cities. They may have no bus accommodation; it may be too far to walk, and if they cannot buy motorcars at reasonable prices I wonder how they are going to get to work and get home again after their day's work is done.
I am not going to say any more at this time except to suggest that last night I saw a picture showing some of the exploits of Robin Hood. If we had a Robin Hood at this time, instead of what we have over here in the person of the Minister of Finance, perhaps we would have a little better distribution of the goods Canada can produce.
Many of us are not seriously affected by these taxes because we have our indemnities, and some have other means of getting along. But we must think of those who are starting out, and who are doing an honest day's work or an honest week's work in the building up of our economy. There should be some consideration for them.
If we had a Robin Hood who would take from those who have and give to those who have not, but who are making an honest attempt, it would be a good thing for Canada.


Douglas Charles Abbott: I am not too keen a student of history, but my recollection is that Robin Hood took from the rich and gave to the poor.


Robert Fair: I do not want the poor fellow, who has barely enough to keep him alive, have what he has taken from him and given to the rich fellow because there are still a lot of them around today even if we will not admit it.


Douglas Charles Abbott: I was questioning your reference to Robin Hood.


Solon Earl Low: Mr. Chairman, just one word before the vote is taken. I know the minister must feel rather disappointed that there has been delay in getting the resolutions through and doubtless the government has felt disappointed1, but we have been in earnest in our fight. We have taken into consideration the fact that the government exists today on the support they obtained in 1949 from not more than 47J per cent of the voters of Canada. That means that over 50 per cent of those people are represented on this side of the house. That is the first important thing. The second important fact is that we can guarantee that not less than 90 per cent of the people of Canada are opposed to the imposition of these sales and excise taxes against which we have been protesting.


An hon. Member:: One hundred per cent.


Solon Earl Low: If you like, 100 per cent. Since it has been shown that there are other sources from which the minister could get revenue if he needs revenue to balance his ways and means, and since we have pointed out that the minister may not need any more revenue than he would get if he did not put on these two extra taxes, in the light of these facts we felt that it was our responsibility to the people of Canada to fight them just as long as it was possible so to do. We are not through yet by any means. We may have to yield on the resolution but there is a bill coming up. I am just serving notice now, and repeating what I said some days ago, that if this opposition which represents more than half the people of Canada will band together and fight for the principle we have been fighting for during the last seven days we can bring this government to the point where they will have to yield. That is all there is to it.
I for one am prepared to stay here until Christmas if that is necessary, to fight this battle for the people of this country. I am only saying that that is the reason we have put up this battle. We put it up because we were convinced in our hearts that these impositions should not be made at this time.


Douglas Charles Abbott: Mr. Chairman, I do not think that this debate has been too long and I do not question for one moment the bona fides of any hon. members who have opposed the imposition of the sales tax and these excise taxes and the other things to which opposition has been indicated. One of the responsibilities of a minister of finance, and the government of which he is a member, is to take the decision as to the way in which the burden which he and the government feel is necessary to place upon the people of the country must be shared.
That decision was taken and presented to the house. I think the opposition parties have made it abundantly clear that they are opposed to some of the features of these proposals. That is the job of the opposition parties. I do not think the people of the country are under any illusion that the opposition are not opposed to the government's financial proposals. What the opposition would do if they had the responsibility of putting forward the proposals is a different matter and one into which I do not propose to go. I am quite satisfied to have had this discussion and I do not criticize any hon. member for the time he has taken in presenting his point of view.


Stanley Howard Knowles: Mr. Chairman, just a few words. First, I want to point out that if a vote is taken on this resolution It should be noted that it involves tax increases to the

extent of $194 million. It involves also certain tax decreases, but they amount to only $14 million. Since we are denied the right of voting on the sections individually and are faced with the necessity of voting on the resolution as a whole we have to look at it in its entirety. We see it as a resolution that grants relief of only $14 million by way of decreases but imposes $194 million by way of increased taxation. Since we have to take the resolution as a whole, good and bad together, and since there is so little good in it and so much bad, we are opposed to it.
In connection with the way in which the Minister of Finance proposes to raise his additional revenue, may I point out one significant feature. According to the table which he placed on Hansard at page 1814 we are given the amount in dollars which *the different increases in taxation will produce. We find that the sales tax will produce an increase of $105 million over what it would have produced had the increase in the rate not been made. We find that the other excise taxes will produce $89 million in revenue more than would have been the case if the taxes had not been raised. We find that the personal income tax will increase by only $85 million, and the corporation income tax by $126 million.


Douglas Charles Abbott: That is for the balance of the current year, not for a full year.


Stanley Howard Knowles: That is right. I am making a comparison between things that are comparable.


Douglas Charles Abbott: I suggest to my hon. friend that the fairer comparison would be for the full year. The excise taxes took effect immediately but there is a lag in the income taxes. I would refer my hon. friend to the second column.


Stanley Howard Knowles: I am referring to the third table on page 1814.


Douglas Charles Abbott: Read $125 million for the full year.


Stanley Howard Knowles: All right.


Douglas Charles Abbott: I think that is a fairer comparison.


Stanley Howard Knowles: For the full year the increase in the sales tax would be $125 million rather than $105 million; in the income tax, $158 million rather than $85 million; in the other excise taxes, $110 million rather than $89 million. It is true that taking these figures the percentages I want to give would be altered. I shall be perfectly fair and say that they would be different, but I have not
Excise Tax Act
the time to work out the percentages now that I am on my feet. But I want to give the percentages that apply in this year because after all that is what counts. Before we get to another fiscal year no doubt there will be other changes in the minister's fiscal policy. What we want to deal with now is the tax that applies to the fiscal year 1951-52, and these changes are indicated in the table that I have referred to on page 1814.
Taking the actual number of dollars which the minister proposes to get over and above the number of dollars he would have got if he had not made these increases, the results are that from personal income tax the increase would be 10-8 per cent; from sales tax, 21-2 per cent; and from the other excise taxes an increase of 37-3 per cent. If we were to take these two categories of excise taxes and put them together, namely, the general sales tax and the other excise items such as taxes on refrigerators, stoves, washing machines and so on, the over-all average of the excise taxes has increased the revenue to be taken from the Canadian people by 26-4 per cent. I ask that the committee set these two main figures alongside each other. The increased revenue to be taken by the treasury from the Canadian people on the basis of income tax, the tax that is nearer to being fair, the tax that is based on ability to pay, is only 10-8 per cent. The increase to be taken by taxes on commodities, the kind of taxation which is not based on ability to pay, is in the over-all picture an increase of 26-4 per cent.
It is my contention that even before these changes were made there was too large a proportion of government revenue taken in commodity taxes as opposed to the proportion taken by the fairer method, namely, the income tax. By the changes being made in this resolution along with the other one, that already unfair proportion is being made just that much worse. For this reason, as well as for the reason I gave earlier when I pointed out that the net effect of this resolution is $180 million increased taxation on commodities, we in this group are opposed to this resolution.


Louis-René Beaudoin: Is the committee ready for the question?


John Horne Blackmore: Mr. Chairman, before we
vote, I wonder if members of the house yet realize what these imposts mean. There are tens of thousands of people throughout Canada who today are at their absolute wits' end to know how to live. Let it not be forgotten that the bailiff is on the job. He is

Excise Tax Act
going around from house to house, from street to street and threatening people with ejection from their homes. He is threatening to seize their furniture and sell it. Taxes in the communities are being increased, many of them will be increased still further by reason of these imposts, and the bailiff is around threatening their homes with seizure if they are unable to pay their taxes.
What is actually happening is that the Minister of Finance is thrusting his mischievous hands in the pockets of the people and taking out from them the very money which people have to have in order to be able to live. This is more serious than words can make it appear. The minister just smiles about it. I would think there is cause for tears. I know in the town in my constituency where I live there are a good many people who have already shed tears by reason of these imposts. If they were absolutely necessary it would be a different thing but they are not necessary, not by any manner of means. If we are managing our country on a financial system that makes measures like these necessary then the sooner we change that financial system the better.


Mr. Fleming:: Change the government.


John Horne Blackmore: Surely everyone can see
that something has gone radically wrong when a country as wealthy as Canada in every respect, with the type of people Canadians are, has to have imposts of this kind thrust upon the people even before we are at war. That is what we are faced with. I said a few minutes ago that this kind of measure is not necessary. I have already made two speeches on debt-free money during the last few days. A great many people have disregarded the speeches but let me tell them they disregarded those speeches at their peril.


Some hon. Members:: Hear, hear.


John Horne Blackmore: I am not threatening anybody but if you once get the people in this country to the point where they begin to believe that it is absolutely impossible to elect a government that will rule them decently, then you can imagine what they will do.


An hon. Member:: A Social Credit government.


John Horne Blackmore: Of course. There is no
question about that. Social Credit will solve the problem. We have a lot of people who know as much about Social Credit as they do about what is on the other side of Mars. Yet they are laughing like silly fools, cackling like jackdaws. We have got to the point now where something must be done other than

the imposition of taxation measures like these. There are any number of people who will cackle away about the proposals of Social Credit but they have no arguments to offer against them. They do not dare to try to answer the arguments of Social Credit. The Minister of Finance does not dare to try to answer them. He does not dare to because he knows he cannot refute the arguments of Social Credit.
We are faced now with a situation where we must have money; we will all grant that. But to take money away from people by such a nefarious tax as the sales tax is a scandal to this nation. Let me just show the minister the absurdities that are involved. He has implied, and the bank managers all over the country, bless their dear hearts, have been trying to convey, that you have got to tax more in order to curb inflation. The minister has tried to get us to believe this taxation is an anti-inflationary measure, that one of the reasons for this tax is to oppose inflation. Why oppose inflation? Because he presumes that we have a shortage of goods in Canada, and the dear member for Greenwood supported him. "We have got too many dollars chasing too few goods" they say. He maintains or tries to pretend or establish the idea that we have a shortage of goods and too many dollars chasing the goods. He says that therefore we have got to take the dollars out of circulation so that the prices of goods will come down.
Let me just show you the kind of situation the minister is in, and let him figure his way out of it. At page 1762 of Hansard of April 9 the Minister of Trade and Commerce had certain things to say, and I ask all these people who know so much to listen to what is said here.


An hon. Member:: Oh, we hear you.


An hon. Member:: Go ahead.


An hon. Member:: Carry on.


John Horne Blackmore: The important thing is to use your heads for thinking instead of rattling something.


Louis-René Beaudoin: Order. May I ask the hon. member to address himself to the Chair.


John Horne Blackmore: Mr. Chairman, did you ask me to address you? I shall be happy to do so. I love talking to you, Mr. Chairman. Listen to these words of the Minister of Trade and Commerce. He said:
I am sure that we can get along quite comfortably as consumers and still engage in a substantial defence effort. A few things may in the course of time become unavailable or relatively scarce, but standards of living will remain high. Unless all-out war comes. Canadians can continue to live well.

How many tens of thousands of people will these taxes make unable to live well?


Some hon. Members:: Hear, hear.


John Horne Blackmore: There are tens of thousands, hundreds of thousands, who are not now living well, and I defy the Minister of Finance to say they are. I defy any member on the government side to say they are. Hundreds of thousands of them are not living well now.


An hon. Member:: Where?


John Horne Blackmore: In Toronto, Montreal,
Winnipeg, Edmonton, Calgary, Saskatoon, Regina, Halifax, Vancouver, Victoria. Name all the cities in the country and you will find them by the thousands.


Mr. McCann:: Oh, oh.


John Horne Blackmore: The well-fed Minister of
National Revenue has quite a lot to say on these matters. It would not take me very long to guide him through Ottawa and show him thousands of people who are suffering right here in the city of Ottawa within a mile or so of this house. They are suffering, and this proposes to make them suffer more, though the Minister of Trade and Commerce has solemnly declared in this house that people in Canada do not need to suffer. How does the Minister of Finance figure his way out of this? That is what we want to know. He cannot do it. Is he prepared to contradict what the Minister of Trade and Commerce says regarding the supply position in Canada? If he is not, if he has to concede that his colleague knows what he is talking about, then the Minister of Finance cannot possibly justify the imposition of such taxation in order to decrease the cost of living.
Very well; one of the main reasons he advances or tries to suggest for imposing these taxes is completely swept away. Surely everyone can see that. His next argument is that we have to raise the money. Well, I am going to state once more, even at the expense of having a good number of shallow people laugh about it, that today this government can create the money the minister proposes to raise, every single dollar of it, with the power of the government conferred upon it by the Canadian constitution, and put that money into circulation without causing the slightest ripple in the price structure. Why do I say that? Because the Minister of Trade and Commerce has pointed out very clearly that we have enough goods so the people can live well; and certainly putting $400 million or $500 million more into circulation among the poor is not going to make them live any more than just fairly well. Those are the fundamental facts which confront us as Canadians.
Excise Tax Act
Now let me raise another point. This budget is laying down a principle; it is pointing the way. It is saying to Canadians that the bigger war effort they want the more of this kind of abomination they will have to take. Never mind if as a result you cannot buy your fuel. Never mind if as a result you cannot pay your rent. Never mind if as a result you cannot wear shoes. You have to pay these taxes and you are going to like it, because you elected a fine Liberal government which is going to see that you do. They have not sense enough to see any other way of doing it, so the people will have to go ahead and like it. That is what it means. The minister has laid this down very definitely. This is going to be a pay-as-you-go war. This means that no matter how much we can produce, no matter how great our resources may be, we cannot expand the war effort of Canada any further than we can get money by stealing it out of the pockets of the people and putting them in misery and poverty. In other words the principle which underlies this budget limits the extent of Canada's participation in defence. Let us see if anyone can answer that.
Some will say that when the war gets a little worse we will begin to borrow. When the war gets a little worse and we have to use more of our goods for the support of our forces abroad it will be harder than ever to continue a pay-as-you-go policy.


Louis-René Beaudoin: Order. I ask the hon. gentleman not to go so far afield from the subject under discussion.


John Horne Blackmore: Thank you very much, Mr. Chairman; but as I see it the whole thing is centred right around this set of pernicious taxes.


Mr. Hansell:: Whether we are to tax or not; that is the question.


John Horne Blackmore: And whether we are going to be able to fight a war with our full force, whether we are going to be able to use all our manpower and material resources to fight a war, or whether we are going to be hamstrung and trammelled by finance. It is a certainty that if we get any more taxes like these the people of this country are not going to become prosperous as the war advances, and are not going to become any more able to pay taxes. This is more than serious. We are not faced with the kind of proposition we were faced with at the beginning of world war II or world war I. We are faced with a struggle for our very existence, against the greatest power we ever went up against. For us to sit here calmly and talk about this thing in this way is absolutely preposterous.

Excise Tax Act	*
Hon. members opposite are feeling quite unhappy because the opposition has put up a puny little struggle. What if they had been up against the kind of opposition William Lyon Mackenzie King put up against R. B. Bennett during the five years that man struggled against a depression which William Lyon Mackenzie King had helped to bring on? If this government had to carry on against an opposition such as William Lyon Mackenzie King and his party put up against the Conservative government in those five depression years they would know what opposition was. Beside that opposition the puny little efforts we have put forth during the last seven days would amount to small change. I happen to know. I do not know how many members now in the house were in parliament at that time; probably there are a few. I was told by one who was here that hardly a day went by when four or five or six Liberals would not ask questions of the government without ever giving notice; and that is just an example. That is the kind of opposition they had, just dirty, sordid opposition; just meanness. It is too bad to say that about men who have passed on, but that is what occurred. Yet the moment a little bit of effective opposition is put up against the Liberals today they begin to whine like babies; they call order, and all the rest of it.


Louis-René Beaudoin: Order. I ask the hon. gentleman again to discuss the merits or demerits of the Excise Tax Act resolution.


John Horne Blackmore: Thank you, Mr. Chairman. I do not see how a man could discuss this excise tax more specifically and more pertinently than I am doing. That is another serious matter, the question of opposition. What is the responsibility of the opposition? As the hon. member for Peace River has said, one of the responsibilities of the opposition is to help see that the government does not make dangerous blunders.


Louis-René Beaudoin: Order. I must rule that the hon. member is out of order in discussing the merits or value of opposition in the house on this Excise Tax Act resolution. I ask him not to refer to that again.


John Horne Blackmore: Thank you, Mr. Chairman; I have said all I want to say on that subject. Now here is the reason we have so sternly opposed this measure. I am only sorry we are not better organized. I am not naming any particular group; I think on the spur of the moment we have organized a pretty good struggle, but if the whole body of the opposition including our Conservative friends had co-operated in this thing we probably could have got something for the Canadian people. But we are going to have to let this thing go

through because we are not organized to keep on talking. But when we let it go through-


Louis-René Beaudoin: Order. The hon. gentleman is again violating the rule of strict relevancy. That is a very important rule, and already he has been told twice that he should abide by the ruling I have made.


John Horne Blackmore: It is too bad I cannot hear what you say, Mr. Chairman, but I can pretty well guess what it is.


Louis-René Beaudoin: Order. May I ask hon. members to co-operate by remaining as silent as possible. I am now directing the attention of the hon. member for Lethbridge to the rule of this house which calls for a discussion to be strictly relevant to the item before the committee. I believe it is standing order 58; and standing order 40 goes further than that. I will read standing order 58, paragraph 2, to the hon. member. It says:
Speeches in committee of the whole house must be strictly relevant to the item or clause under consideration.
At the moment I cannot put my finger on that standing order 40 which says in effect that any hon. member who has just been called to order for not having observed the rule of strict relevancy may be subject to severe measures. I would ask for the hon. member's co-operation. Twice he has spoken about the organization of the opposition and the opposition itself. That certainly does not relate to the resolution that is now before the committee. I will therefore ask him to cooperate, as he usually does, with the chairman and the members of the committee.


John Horne Blackmore: I certainly desire to cooperate with you, Mr. Chairman, but after having been here for seven days and listened to the kind of thing we have had to listen to, and having had to look at the sad countenances of the government, reflecting their feeling of injured dignity, I am inclined to speak just a little bit freely. But I shall defer any such talk as that until a later time. May I commend you, Mr. Chairman, for the way in which you are handling matters.
I will just say this in closing what I have undertaken to say. Here is a set of measures which are pernicious through and through. There is not a commendable feature in any one of these sales taxes; neither is there one in the excise tax. If the desire is to limit the consumption of refrigerators and electrical appliances, rationing can easily be applied. If the desire is to eliminate consumption of any other kind in Canada, rationing can be applied. But there is no need for it at the present time. Rationing can be applied in two ways, either as the article is

being offered for sale over the retail counter or as the supply of raw material is being permitted to come to the factory. It is the simplest thing in the world to limit these things and save the use of necessary war materials. No reason at all under the sun can be given for these taxes. As I said, they are pernicious through and through; they are inflationary; and as a means of getting revenue, they are utterly unnecessary. I am opposed to them with all the energy that I have. Since we are probably not strong enough to go any further, I shall have to cease until I get another chance to talk.


Louis-René Beaudoin: Is the committee ready for the question?


James MacKerras Macdonnell: No, Mr. Chairman.


An hon. Member:: Anticlimax.


James MacKerras Macdonnell: Maybe so; but it will be a short one, anyway. I have been ready to vote on this resolution more than once, Mr. Chairman. I do not know whether it is the last speech that has inspired me to say a word or two more. I do not find myself fully in agreement with everything that has been said by the hon. member for Lethbridge; but one thing he said I think is perfectly true and I wish to repeat it before this vote is taken. Even yet we have had no evidence, or even no statement offered to us by the Minister of Finance, as to the absolute need for this tax. When we pointed out to the minister the years in which his excess collections of revenue have been not tens of millions or scores of millions but hundreds of millions of dollars, his answer, as I recall it, was that while it was true he had overestimated, nevertheless he had not overestimated much more than had the authorities in Britain, or in Ontario, or where you please. To me that is just the old argument of the pot and the kettle. So far as I can recall, the minister has never yet said a single word to deny the argument which has repeatedly been made here, namely, that if the gross national product is what he himself has estimated it to be, in all probability we shall have a surplus which will be more than enough to take the place of this reduction which we have asked.


Louis-René Beaudoin: Is the committee ready for the question?


Some hon. Members:: Question.


Louis-René Beaudoin: The question is on the excise tax resolution.
Resolution agreed to: Yeas, 59; nays, 39.
Customs Tariff


Louis-René Beaudoin: I declare the resolution carried. We shall now consider the income tax resolution.


Douglas Charles Abbott: No, the customs tariff.


Stanley Howard Knowles: Which amendment was it that carried?


Louis-René Beaudoin: I did not hear the hon. member's question.


Stanley Howard Knowles: I thought you said that you declared the amendment carried. I presume you meant the motion, Mr. Chairman.


Douglas Charles Abbott: The resolution.


Louis-René Beaudoin: Perhaps the hon. gentleman did not hear me. I said that I declared the resolution carried.


CUSTOMS TARIFF
[Stage Direction]
1. Resolved, that schedule A to the customs tariff, being chapter forty-four of the Revised Statutes of Canada, 1927, as amended, be further amended by striking thereout tariff items 216f, 296e, 386 (p), 403(e), 409f, 410g, 410h, 410i, 410j, 4101, 410o(i), 410p, 410q, 410r, 410s, 410t, 410u, 410v, 410w, 410x, 410z, 435, 440k, 475, 523g, 682, 705, and 708, the several enumerations of goods respectively, and the several rates of duties of customs, if any, set opposite each of the said items, and by inserting the following items, enumerations and rates of duty in said schedule A:
Louis-René Beaudoin: We shall now consider the customs tariff resolution. Shall the resolution carry?


James MacKerras Macdonnell: I wish to ask one or two general questions with regard to the tariff. When the minister spoke in his budget speech he referred to the meetings which had been taking place at Torquay and to the fact that no announcement regarding them could be made until, I think, May 9. The question that I want to ask the minister is this. Will he enlighten us as to the division of what I will call the tariff problem and tariff negotiations. We have had negotiations going on for months at Torquay, following previous negotiations at Annecy two years ago, I think it was, and negotiations at Geneva four years ago. I should like the minister to tell us something of the scope of those negotiations, explaining the relationship which they bear to the operations meanwhile of our own tariff board. I should also like to ask whether some of the proposals which are in the schedule to the resolution are the result merely of negotiations which have taken place with individuals. In other words, my question is really threefold. What is the scope of the negotiations going on at Torquay? I raise this question particularly by reason of whatever tariff changes there are affecting us and the United States. In the second place, what is the relationship of what is going on there to the operations of

Customs Tariff
our own tariff board? I am not quite sure whether it has been in abeyance or what it has been doing. Third, are any of the proposals in the schedule the result neither of what has been going on at Torquay nor of the proceedings before our own tariff board, but merely the decisions of our own department in negotiation with individuals?


Douglas Charles Abbott: To answer the last question first, Mr. Chairman, none of the customs tariff proposals which are before the committee have any relation to the discussions at Torquay. The tariff changes which are made here are of some significance but they are not of wide application. I do not know that I can add much in general terms to what I said in the course of my budget speech. There are a number of items which come within the classification of farm implements, to which free entry is given under the proposed customs tariff resolution. There are new tariff schedules with respect to the plastic items which implement a report of the tariff board which I tabled at the conclusion of my budget speech. As to the discussions at Torquay, as my hon. friend has indicated, a concurrent statement will be issued on May 9, by the various countries interested. As to those negotiations, I can add nothing to the general statement that I made in my budget speech, but a full statement will be issued on the ninth. There will, I expect, be a statement in the house and a rather more complete press release issued at the same time.
As to the functioning of the tariff board, that board has been extremely active. It has been hearing a great many appeals. There have been a great many references. In the absence of the chairman of the board, Mr. Hector McKinnon, at Torquay, the deputy chairman, Mr. Leduc, and the other member of the board, Mr. Buchanan, have been sitting as a board. I do not think I can add anything more than I have said in the general statement on the tarifE proposals.


James MacKerras Macdonnell: I have one
supplementary question. There are certain tariff concessions to the United States. I am not questioning these now. They seem to me, as far as my knowledge goes, to be reasonable, but it raises this question in my mind. Did we get any quid pro quo for them? It raises also this question. In our negotiations at Torquay are we, or are we not, in a better position when everybody is seated around a table to get a quid pro quo? A third addition to the question is this: What is the division which results in the fact, as I understand it. that these changes that you have now made are made without quid pro quo? The minister will inform us on that. If without quid pro

quo then my question is, are we in a better position to get a quid pro quo at Torquay and further, if that is so, why are these particular matters not the subject of negotiation at Torquay?


Douglas Charles Abbott: First, as to the items in this tariff schedule, they are unilateral changes. There is no quid pro quo, as my hon. friend puts it. They represent items in which we consider it is desirable that the tariff should be changed. In most cases they are reductions in the interests of the Canadian consumer. I should add, in line with what my hon. friend has said, that we have not made reductions in any items which it was considered would be of any value in the trading negotiations at Torquay. We have kept any items which we felt might have a trading value in the Torquay negotiations, for these negotiations; and consequently there are no items here which the government, or its negotiators at Torquay, felt would be of value in these discussions.


James MacKerras Macdonnell: Just one
further question. I observe what the minister has said, that this is unilateral, and it was not considered that they were such as would have any weight in negotiations, but on the face of it, that statement does not strike me as being very convincing. I mean, they might not have very much weight and yet it is hard to-


Douglas Charles Abbott: The majority are technical
readjustments in those agricultural items and plastic items to which I have referred.


James MacKerras Macdonnell: Let us take this, because after all something more might be said on that point. I am not questioning this; I am only asking for light as to why those might not have been thrown into the balance along with the things which I presume are being thrown in the balance at Torquay, and where I gather we are very much in need of things to throw into the balance.


Douglas Charles Abbott: At the time we prepared these tariff proposals we knew what we were going to get at Torquay, and we knew what we were going to have to give. I would be glad if I could announce the results of Torquay. I take it the committee realizes that in these discussions it is part of the arrangement that the negotiators report back to the governments and the governments consider the proposed agreements and then concurrent announcement is made after it is approved.


Mr. Green:: I have one example on the
point which the hon. member for Greenwood

has raised. I think sprinkler irrigation systems come under item 409f. We have had some young men establish a plant in Vancouver to manufacture sprinkler irrigation systems. They are just getting nicely into the business and are able to meet the demand when suddenly these sprinkler irrigation systems are deprived of protection. They lose any protection they have, and yet there is no removal of the United States duties; with the result that that firm probably will be put out of business. They cannot get into the United States market because of the high United States tariff, and yet Canada takes her duty off and allows the United States firms to wipe out that business.
I do suggest to the minister that that particular item might have been held until some reciprocal arrangement was made with the United States. There is no reason why we should allow their sprinkler systems in free when they will not allow ours to go into their country. For all the difference it would have made to the users of these systems, I do suggest that a mistake has been made on this particular item. The removal of the duty should be delayed until an attempt at least is made to have the United States take off their duty. Surely to goodness the Canadians should be on the same basis as the people of the United States. Why should we be unable to sell our goods to them? The handicaps are big enough even if the duty is the same on the goods going each way. There I think is a case where there should have been negotiations and an attempt made to get the United States duty taken off.


Douglas Charles Abbott: I am familiar with the situation to which my hon. friend refers. I was aware of it before we arrived at the decision to include the items in question. The United States negotiators were not interested in a tariff concession here, and the decision to remove the tariff on these items was made in line with the basic policy decision taken in 1944 that agricultural implements and articles used in agriculture would be free of duty. My hon. friend will recall that Mr. Ilsley announced that policy. Since that time, it has been: urged upon us that various specialty items, such as sprinkler systems, are used, and extensively used, in agriculture-and these irrigation systems come within that category.
I know the firm in British Columbia which has just started. I am sorry that the removal of the tariff should come just at the time when it is getting going, but as the committee knows, I am not one of those who believe in the infant industry theory; and I do not want industries created behind a tariff wall which may create problems in the future.
Customs Tariff
Careful consideration was given to this particular item, and a decision was taken that it should be included in the agricultural group to which I referred.


Howard Charles Green: What is almost sure to happen is that once the United States firms get this Canadian firm out of business they will be in a position to charge whatever they like to the Canadian farmer.


Douglas Charles Abbott: I think we will recognize that it is unlikely that there will be widespread manufacture of this type of equipment in Canada. There never was, up to a year or so ago. Unfortunately, the United States tariff is, on the average, very much higher than ours. That is one of the great disabilities under which we labour here. We have a relatively low tariff; they have a high tariff; and that is why we have been so anxious in these succeeding discussions at Geneva, Annecy and Torquay to whittle away at the United States tariff; but nevertheless, whatever their tariff may be, in this country we have adopted the policy that so far as agricultural equipment and implements are concerned, they come in free.


Howard Charles Green: I think one reason the policy has been adopted is that leading Canadian farm implement manufacturers are able to stand on their own feet and ship throughout the world. But, as the minister said, this is a special type of product, and it is not in that category at all.
We are going to have a big aluminum development in central British Columbia within the next two or three years. I believe these sprinkler systems are made of aluminum, and there will be need for a market for that product. I hope the minister will give some further thought to this item because it is unfair that the Canadian producer should be placed in the position where the Americans can come in and wipe him out, but he cannot get into the American market at all.


Douglas Charles Abbott: I am looking at this particular situation again in connection with another matter, to see whether on parts, and so on, any assistance can be given to that industry.


Mr. Herridge:: The Americans subsidize the export of apples to Canada and other countries to the extent of $1.25 a box. That artificial competition quite recently caused the British Columbia fruit growers to sell about 100,000 boxes to Ontario and Quebec cu, auoui a aoiiar a oox, wmca is- very little more than the cost of packing and of the boxes. Does he consider that a subsidy that creates artificial competition with Canadian fruit is in keeping with the spirit of the Geneva agreement?

Customs Tariff


Douglas Charles Abbott: I was not aware that such a subsidy existed. However, the hon. member knows more about that business than I do. As he is no doubt aware, the tariff on Canadian apples going into the United States is very much lower than the tariff on American apples entering Canada. That is one of the relatively lew cases where the American tariff is lower than our own. However, I have to look at the type of export subsidy to which he refers in order to see how it is affected by the Geneva agreement.


Herbert Wilfred Herridge: Will the minister check that matter?


Douglas Charles Abbott: I shall be glad to.


Mr. White (Middlesex East):: Mr. Chairman, I should like to ask a question regarding item 409f. While it deals with a wide range of agricultural machinery, I am interested particularly in grain or hay driers. A year ago some farmers in my constituency imported grain and hay driers. When they consulted the department they were told that because the equipment was for agricultural purposes it would be admitted free. Once it was landed in London, however, the duty was charged, and they had to pay it.
I came to Ottawa to protest, and the duty was paid under protest. I see by this item that this equipment is now admitted free. Is there any chance that these people will receive a refund in respect of those articles?


Douglas Charles Abbott: I think not. I gave pretty careful consideration to the driers to which the hon. member has referred. After discussing the matter with my tariff advisers I came to the conclusion that this equipment was pretty much outside the ordinary range of agricultural equipment or implements, and took us into a completely new field. I will add that it was something I felt that in another year I might consider further. But I had to get a great deal more information as to what similar items might be affected before I would be prepared to remove the tariff. Therefore I think I could say clearly that this year I would not be prepared to make a recommendation to eliminate the tariff on those articles.


Harry Oliver White: I note that under item 409f they are now free.


Douglas Charles Abbott: I am not quite sure as to the exact part to which the hon. member is reierring.


Harry Oliver White: I am referring to tariff item 409f.


Douglas Charles Abbott: I am fold that this covers driers except what are described as big bins.


Harry Oliver White: The fans and motors are included?


Douglas Charles Abbott: Yes.


Harry Oliver White: I might point out that in Iceland there are more hay driers used than in all Canada. With their wet weather they have become almost a necessity.


Douglas Charles Abbott: We will look at it another year, but that has been why we have decided against it.


Edmund Davie Fulton: I should like to support what was said by the hon. member for Kootenay West with regard to apples. This was a case where British Columbia had virtually to dump apples in Ontario at a loss, and this I believe was the result of subsidized American exports.
Then I should like to refer briefly to the question of vegetable oils entering this country. This afternoon during the discussion of another resolution the minister said that so far as he was aware he had had no representation from the dairy industry council on-


Douglas Charles Abbott: I believe I had from the dairy council. I thought it was the federation of agriculture to which reference was being made. But I believe I did have representations from the dairy council.


Edmund Davie Fulton: I have had representations from the dairy industry in my own constituency and, although I cannot state it as a fact, it is my understanding that they had written to the minister suggesting either a customs tariff or an excise tax on imported oils. I have no desire to return to the discussion of the excise tax resolution, but I wonder if the minister would tell us the attitude of the government in the matter. I was greatly impressed by the argument put forth this afternoon by the hon. member for Danforth. What he said certainly covered the situation in the dairy industry, and the whole question of this very cheap substitute product coming into the market. I am more particularly concerned because of the argument which, on the face of it, is hard to meet, namely that margarine affords a cheap substitute for butter, and that therefore it is wrong to do anything which would increase the price.
It seems to me that argument is completely removed when we find that the margarine producers put up their price to the extent of about ten cents a pound simply because the price of butter went up, despite the fact that the cost of production of margarine had not increased.

I strongly urge the minister to look into this situation. If he finds that the margarine manufacturers are taking advantage of the consuming public in this way it should influence his decision as to whether or not the national treasury should derive some revenue from their imports.


Douglas Charles Abbott: The whole question will be studied, as to whether further protection should be afforded the dairy industry by substantially increasing the barriers to the importation of margarine or its ingredients from other countries.
I believe I should say however that it was our general feeling we should not take action of that kind while the proceedings at Torquay were under way. I am one who believes that the results achieved at Geneva and at Annecy should have substantial influence and were responsible to a substantial degree for the marked improvement in our balance of trade with the United States. I indicated before that in my opinion we have obtained a very satisfactory trade agreement at Torquay. I hope the house will agree with that when they see the results.
So, speaking generally, I felt and my colleagues felt it would be extremely unfortunate to take any action by imposing any further barriers to a free flow of trade between countries when we were arguing strenuously at Torquay for a lowering of those barriers.


Edmund Davie Fulton: It is not an easy problem.


Douglas Charles Abbott: It is a difficult problem, as the hon. member knows.


Edmund Davie Fulton: But the particular thing that irritates me is the fact of their increasing their price without apparently any excuse or any increased cost, just because the price of butter went up as the result of an unexpected development in the supply of butter.


Donald Methuen Fleming: There are several questions I should like to put to the minister. The first has to do with the country or countries from which most of these commodities which are the subject of decreases in tariff come. Will the minister indicate what countries will benefit from the proposed reductions in tariff rates, or those which will principally benefit?


Douglas Charles Abbott: As I think I indicated in my remarks on the budget, the principal reductions are in the agricultural implement field, diesel engines for use in fishing vessels, mining equipment and certain plastic items. Those items in the agricultural implement field will come mostly from the United States.
Customs Tariff
The mining equipment would come principally from the United States with some from the United Kingdom. I think it is fair to say that most of that type of equipment *comes from the United States. The diesel engines would come from the United Kingdom and the United States, but I would think the United Kingdom would have a decided edge because of the preferential rate. The plastic items would come principally from the United States, but the United Kingdom would also be able to avail itself of the reduced rates.


Donald Methuen Fleming: It is quite clear that the United States will be the chief beneficiary.


Douglas Charles Abbott: Others will be as well, but the United States is the principal supplier of these things.


Donald Methuen Fleming: We are dealing with them in general terms. I was under the impression, which the minister has now confirmed, that the United States will be the chief beneficiary.


Douglas Charles Abbott: My hon. friend will appreciate that they are not broad reductions.


Donald Methuen Fleming: The United States will be the chief beneficiary of the proposed reductions.


Douglas Charles Abbott: The Canadian consumer will be the chief beneficiary, if I may say so.


Donald Methuen Fleming: There are two sides to this. I was thinking in terms of benefits to the producers. Obviously these benefits will flow chiefly to the United States. For that reason it surprises me to hear the minister say that the United States were not interested in any bargaining at Torquay with respect to any of these items. Knowing how astute the United States businessman is and how ready his government is to further his interests it seems unusual to me that the United States were not prepared to do some bargaining in return for the benefits to the United States producers which these proposed reductions offer.
My second inquiry is as to the estimated loss of revenue to the Canadian treasury from the proposed reductions. The minister may wish to indicate at the same time what increase in revenue is contemplated from such increases in the tariff rates as are involved in the present proposals. Perhaps he could then give the net figure, the overall estimated reduction in revenue.


Douglas Charles Abbott: I am afraid the only increase is, as I indicated before, in the plastic items. I am sorry that no estimates have been made as to the increases in revenue which would result. Similarly it is hard to estimate with any degree of accuracy what decrease in

Customs Tariff
revenue there will be. However, it will be quite small in our picture. Of course, it is important to the people who have to import these articles. The fisherman who has to import a diesel engine for his boat and the farmer who has to import a milking parlour or some of these other things finds that it is quite important, but in the aggregate customs revenue it is pretty insignificant. Perhaps I could have an estimate made and give it to my hon. friend when we are in committee on the bill.


Donald Methuen Fleming: My next question has to do with the application of the Geneva agreements, if at all, to the proposed reductions. What application will the Geneva agreements have to the reduced rates that are proposed?


Douglas Charles Abbott: If any of these rates are below the rates fixed in the Geneva agreements, we are not to be bound. However, we are free to go back to the rates stipulated in the Geneva agreements. We are free under the Geneva agreements or the Annecy agreements, and again under the Torquay agreements, to make reductions in tariff rates without in any way impairing the validity of the agreements, but we are bound not to make increases without complying with whatever the formalities are under the agreements.


Donald Methuen Fleming: To how many commodities on which it is proposed to reduce the tariff rates do the Geneva agreements apply?


Douglas Charles Abbott: I am informed that some of them will probably be covered in part, but there are no complete items.


Donald Methuen Fleming: My next inquiry has to do with the timing of the present resolution. In his budget speech, as reported on page 1813 of Hansard of April 10, the minister made reference to the tariff negotiations which had been taking place at Torquay during the past six months and said:
It has been arranged between the countries represented at Torquay that the details of the agreements resulting from the negotiations will be announced by the participating governments on May 9. Consequently I am not in a position to review the results at this time.
It would only be a matter of speculation until we know more about the results at Torquay as to what effect the Torquay agreements may have on any of these items, or what the result may be to the general picture of trading between one country and another in respect of tariff concessions. I am not proposing to ask the minister to delay the adoption of this resolution, but in order that the matter may have adequate consideration I wonder if he will agree that he will not move second reading of his bill to amend the Customs Tariff until after May 9?


Douglas Charles Abbott: That is an entirely appropriate suggestion and I shall be happy to do that. I think it will be most helpful if the house could study the bill after the details of the Torquay agreements have been announced. I think that would be an excellent way to proceed.


Howard Charles Green: They will be announced next Wednesday?


Douglas Charles Abbott: On the ninth; yes, next Wednesday. I doubt if we would get to it before that.


Donald Methuen Fleming: There is one other matter I should like to mention to the minister, and with approval. The minister may wish to send for smelling salts or something else to overcome the effects of surprise. I should like to mention item 705 in which the minister proposes to extend the period within which settlers may bring in their effects and still have them treated as settlers' effects. It seems to me that this is a most praiseworthy move. I cannot think of anybody whom it is going to hurt, and I can think of it bringing considerable assistance to many people who otherwise would suffer grave inconvenience and perhaps loss by reason of the present provision which it is now proposed to change. I do not know how large this item bulks in the total fiscal picture or the total trade picture, but it seems to me it is one to which the house will be glad to give approval.


Douglas Charles Abbott: I thank my hon. friend for his congratulations. I agree with him. I think it is a most desirable item. It was made at the suggestion of my colleague, the Minister of Citizenship and Immigration. I have an amendment to the wording of the proviso in item 705 which I shall ask one of my colleagues to move. It broadens its application to include those settlers who have come in during the last three years. We have had it under examination a little more closely than we had been able to at the time the budget resolutions were introduced. I am wrong. It includes those who came in as far back as the end of the last war. I thought it was only three years.


Donald Methuen Fleming: Better still.


Douglas Charles Abbott: Yes. That amendment will be moved when we reach that item. It is merely an amendment to the wording to broaden it to that extent.


Mr. Harkness:: Some two or three months
ago I brought to the minister's attention the question of the customs duty on ground bagged clays or bentonites which are used in the manufacture of drilling mud, a necessary substance in the drilling of oil and gas wells at the present time. The situation with

respect to this substance is that quite a flourishing small industry manufacturing this drilling mud has been built up in Calgary. Its product was much used throughout the province of Alberta. The shipping in of ground bagged clays or bentonites from the United States has now practically put that concern out of business. They have requested that some protection should be afforded. I have looked through these tariff items quite carefully, and I have not been able to find any mention of these bagged clays. I wonder if the minister would tell us what decision he came to and why no action was taken in regard to the matter.


Douglas Charles Abbott: I gave consideration to my
hon. friend's representations, but for the same reason that precluded my giving active consideration to increases in the duties on vegetable oils or other items, because the tariff negotiations at Torquay were pending, it was decided that this year no increased duty could be put on.


Douglas Scott Harkness: That means essentially
then that consideration is really deferred for another year?


Douglas Charles Abbott: That is correct.


James MacKerras Macdonnell: I want to
ask the minister what will happen with respect to the Torquay agreement. What will be its legal status when it arrives here and is presented to this house? Will it need legislative implementation?


Douglas Charles Abbott: I understand that, as was
the case with the Geneva and Annecy agreements, it does not require immediate legislative implementation, but the intention would be that it would eventually receive that. Our attitude has been that we would not hurry our legislative implementation until we saw that formal legislative implementation was being carried through in other jurisdictions, and that is the present status of Geneva and Annecy. It can be put into effect by executive action.


Howard Charles Green: None of these trade agreements have ever been approved formally by parliament?


Douglas Charles Abbott: I believe that is correct.


Howard Charles Green: How long ago is it that the
Geneva agreement was negotiated?


Douglas Charles Abbott: 1947.


Howard Charles Green: Four years ago.


Douglas Charles Abbott: That is right.


Howard Charles Green: Are we in Canada waiting
for the United States?
Customs Tariff


Douglas Charles Abbott: We are waiting to see what
they do. In the meantime we have got substantial benefits under the agreements.


Howard Charles Green: Does the minister expect there will be legislation in the near future on any of these agreements?


Douglas Charles Abbott: Just when I cannot say. I doubt if there would be legislation at this session.


Donald Methuen Fleming: From the minister's answer to the hon. member for Greenwood, I am not quite clear as to what part of the Torquay agreement, if any part, may be brought into operation in Canada apart from parliamentary action.


Douglas Charles Abbott: As my hon. friend knows, tariff reductions can be brought into effect by order in council. That has always been our law. On the other hand, tariff increases have to come to the house.


Donald Methuen Fleming: Are we to assume then that parliament is not going to be afforded an opportunity of passing on the Torquay agreement, save perhaps incidentally in some discussion here, and that, as it may be assumed that it will involve only reductions on Canada's part and no increases in our tariff, the whole agreement so far as Canada is concerned can be brought into immediate effect and operation, or into effect and operation at a later time, simply by executive decision without any expression of approval or otherwise on the part of parliament?


Douglas Charles Abbott: What we are required to do to implement our part of the agreement is to bring into effect such tariff reductions as we may have agreed to in consideration of the tariff reductions received from others. We can make those tariff reductions-and it is done continually-by order in council, and I think the same procedure will be followed here as was followed in the case of Geneva and Annecy. There will of course be, as there was in the case of these other agreements, ample opportunity for discussing the terms and so on in the house.


Howard Charles Green: When?


Douglas Charles Abbott: I cannot give an undertaking as to when.


Howard Charles Green: When was there an opportunity for discussing these other agreements?


Douglas Charles Abbott: I suppose I have not really given much thought to that. I know that Geneva and Annecy have both been discussed here in general terms. I suppose they could be discussed on the estimates of the Department of National Revenue. I think it would be proper to discuss their

Customs Tariff
general effect there. However, I would have to give some consideration to that. I am informed-I had forgotten-that the Geneva schedules were referred to committees of both the Senate and the House of Commons.


Howard Charles Green: They were never formally approved in the house.


Douglas Charles Abbott: Possibly we might give consideration to referring the new schedules in the same way.


Donald Methuen Fleming: Mr. Chairman, I am glad this subject has arisen because, while it seems to be apparent from what the minister has said that no increases in the Canadian tariff will be called for by the Torquay agreements-


Douglas Charles Abbott: That is correct.


Donald Methuen Fleming: -and only decreases will be required, the minister has indicated that legally these agreements may be brought into effect by executive decision without any formal approval on the part of parliament. I do not think that is a satisfactory state of affairs.
Those of us who sat in the last parliament will well recall that in November, 1947, a great to-do was made by the government about calling parliament in great haste to meet in Ottawa. The reason given at that time by the Prime Minister in a public statement for summoning parliament to meet about the first of December, 1947, a most unusual time, was not, as a matter of fact to give legislative effect to the radio budget introduced by the Minister of Finance, but was to lay before parliament for parliament's decision the agreements reached at Geneva.
We met at that time, and the Geneva agreements were not submitted to parliament for approval. As a matter of fact parliament has never yet been asked to give its sanction to the Geneva agreement. The minister has said that the schedules to the Geneva agreement were referred to a committee. They were referred to the banking and commerce committee but, if my memory serves me correctly as a member of that committee, those schedules were never reported out of the committee. They were allowed to die there in the spring of 1948. So far as debate is concerned, I recall one debate. It was one of those indirect debates. It may have been on a motion to refer to the committee, which did not afford an opportunity of bringing the important question of ratification to a neat issue before the house.
I say to you, sir, that the Geneva agreements have never been submitted to parliament in any fashion that would enable parliament to express its opinion upon them.

Similarly the Annecy agreement has never been submitted to parliament under any conditions which would enable parliament to express its approval or otherwise. It gives me a good deal of disappointment to hear an indication from the Minister of Finance tonight that parliament is not to be afforded an opportunity to deal specifically with the Torquay agreements, which we understand to be important, and express in the only way parliament can really express itself, its approval or disapproval of those agreements, by means of a direct vote on that particular issue.
In reviewing the whole situation, Mr. Chairman, it seems to me far too many of these tariff concessions arising out of international agreements have been carried out simply by executive decision. Parliament has been ignored with regard to them. If those agreements are as important as I think most, if not all, hon. members regard them, then surely the very least that should be required of the government is that those agreements should be submitted to parliament in such form and under such circumstances that a discussion can be held directly on the agreements and parliament may express either its approval or disapproval by a direct vote on that particular issue. If parliament does not have that opportunity then it seems to me parliament must review the whole basis on which tariff negotiations at these multilateral conferences are carried on, and recast the whole basis of their implementation by executive action. In matters so important as these it seems to me a crass neglect of the responsibility and supremacy of parliament that parliament should be by-passed and have no more opportunity to pronounce a direct verdict or judgment upon them than by some incidental, oblique kind of discussion on a motion to go into supply, or something of that nature. That does not offer a sufficiently direct opportunity to review these questions.
I think one might also say that in recent years there never has been enough time spent in parliament in the discussion of trade policies. Usually what little opportunity has been afforded to discuss trade matters has been on bills such as this involving minor, and sometimes quite trivial, amendments to the customs tariff. Trade policies are far too important to be so treated. Looking forward now to the time when these Torquay agreements are to be introduced, and assuming they will have the importance we have been led to attach to them, it seems to me that here is an occasion when the government should afford the house, at the earliest convenient time, an opportunity of discussing those agreements and the whole trade

picture in general, which is not free of disturbing factors. At page 1799 of Hansard, in his budget speech, the minister referred to an improved regional trade position in these words:
As a result of these shifts in trade our regional trade became much better balanced.
I think we are all glad to see the United States purchasing more from Canada. We should like to see a much closer balance between our exports to and imports from that country; but no one can survey the over-all trade picture in the world today without feeling very grave concern about the way our sales to the United Kingdom, to the colonial empire and to many of the countries of Europe have undergone a serious reduction in recent years.
I mention that, Mr. Chairman, by way of urging upon the minister and the government that the introduction in the house of the Torquay agreements at a convenient opportunity be made the occasion of a debate on trade, on a motion by the government calling upon the house to give a direct expression of approval or otherwise to those agreements, so the matter may be brought to an issue.


Douglas Charles Abbott: I shall be very happy to bring my hon. friend's suggestion to the attention of my colleagues, to see whether, if the business of the house permits it, his suggestion can be adopted.


Victor Quelch: I would like to associate myself with the remarks of the hon. member for Eglinton. I recall that the Geneva trade agreements were referred to the banking and commerce committee in 1947. There was quite a long discussion; we ran right through them, but it was finally decided not to put a motion for approval, so the Geneva trade agreements were not approved by that committee. I think the reason was obvious. There was a great deal of criticism of various sections of those agreements.
I recall that there were a number of escape clauses in both the Geneva and Annecy agreements, and I think it is correct to say that many nations have already committed a breach of many of the principles embodied in those agreements. It may be argued, of course, that they are still acting under the escape clauses, but the deadline for those clauses I think in some cases is 1951 and in others 1952. I want to know what will happen after those deadlines, as far as the nations still operating under those escape clauses are concerned. Will those nations be allowed to continue to operate under them even after the deadlines have
Customs Tariff
expired, or will they be called upon to fulfil their obligations under those trade agreements?
I have particularly in mind the whole policy of non-discrimination. We have tried as far as possible to adhere to that general principle, though I think when we put restrictions upon imports from the United States we were really committing a breach of it. We have since removed that prohibition, but some countries in Europe are still continuing the policy of discrimination. What are we going to do in the future? Are we just going to let this situation drift, or are we going, by proclamation, to declare that we are no longer interested in that international trade organization as far as those general agreements are concerned?
I think the suggestion of the hon. member for Eglinton is very good, that there should be a general debate on this matter so we can be informed just what the situation is. At the present time we appear to be just drifting^ along, operating under trade agreements which have not been agreed to by this house.


Douglas Charles Abbott: I am rather in agreement
with my hon. friend; I would be very happy to have such a discussion. I must say I think Canada has derived substantial benefits under these agreements. It is perfectly true, as the hon. member has indicated, that the policy of non-discrimination to which we attach such great importance, for reasons which are familiar to most hon. members, has not yet been possible for a good many countries including most of those in the sterling area. We still hope that result may be achieved. I must confess that I did not come fully prepared or briefed to discuss the Geneva agreements and the various escape clauses on this resolution tonight, but the suggestion that we should try to find some suitable occasion when we can discuss questions of trade policy in general is one to which I could certainly give most sympathetic consideration.
Now, Mr. Chairman, I see it is eleven o'clock.


Louis-René Beaudoin: Shall the resolution carry?


Some hon. Members:: No.


Douglas Charles Abbott: I guess we had better let it stand. If we could pass this resolution, of course we have the bill and we have to go through it item by item, but probably it is not appropriate to try to do that tonight.


James MacKerras Macdonnell: I feel that
what the hon. member for Eglinton has said is fully warranted, and I welcome the minister's attitude. I do think we should

Customs Tariff
discuss this resolution a little longer, however. I believe the minister indicated that he would brief himself a little more fully, and the rest of us may do the same.


Howard Charles Green: Could the minister, get information on any changes that have been made in the preference by executive action?


Douglas Charles Abbott: Yes, I will have that information, either when we are back on the resolution or when we are on the bill.


Louis-René Beaudoin: So I may be clear on the matter of procedure, am I to understand that on this resolution a debate on the Geneva trade agreements is to be in order?


Douglas Charles Abbott: No. I am afraid I am not
prepared to discuss the Geneva agreement on this resolution. I do not believe my hon. friends were suggesting that, Mr. Chairman. I think both the hon. member for Eglinton and the hon. member for Acadia were urging that an appropriate opportunity should be afforded to discuss this matter generally, and in particular our obligations and rights under the Geneva agreement, but not on this resolution.


Donald Methuen Fleming: That is quite right, Mr. Chairman. What I was suggesting was that we need the Torquay agreement before us before we can undertake intelligently a discussion of that kind.


Louis-René Beaudoin: What caused me
to make that remark was what the hon. member for Greenwood had said previously.
Shall I report progress and ask leave to sit again?


Some hon. Members:: Agreed.
Progress reported.



BUSINESS OF THE HOUSE

Alphonse Fournier: Tomorrow we shall
take up the estimates of the Department of Labour and of the Department of Resources and Development.


Howard Charles Green: In that order?


Alphonse Fournier: Right.
It being five minutes after eleven o'clock, the house adjourned, without question put, pursuant to standing order.

Friday, May 4, 1951